30-Year Fixed-Rate Mortgage Averages Another Record

In Freddie Mac's results of its Primary Mortgage Market Survey®, fixed mortgages rates continued their streak of record-breaking lows. The 30-year fixed rate mortgage averaged 3.49 percent, more than a full percentage point lower than a year ago when it averaged 4.55 percent. Meanwhile, the 15-year fixed-rate mortgage, a popular choice for those looking to refinance, also set another record low at 2.80 percent.

30-year fixed-rate mortgage (FRM) averaged 3.49 percent with an average 0.7 point for the week ending July 26, 2012, down from last week when it averaged 3.53 percent. Last year at this time, the 30-year FRM averaged 4.55 percent.

15-year FRM this week averaged 2.80 percent with an average 0.7 point, down from last week when it averaged 2.83 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.74 percent this week with an average 0.6 point, up from last week when it averaged 2.69 percent. A year ago, the 5-year ARM averaged 3.25 percent.

1-year Treasury-indexed ARM averaged 2.71 percent this week with an average 0.5 point, up from last week when it averaged 2.69 percent. At this time last year, the 1-year ARM averaged 2.95 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels. The Conference Board Leading Economic Index showed the largest monthly decline in June since September 2011. Existing home sales fell to 4.36 million homes (annualized) in June and represented the slowest pace since October 2011. Similarly, new home sales fell in June to their lowest level since January of this year."

July 27, 2012, Published by Realty Times

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Home Builders Offer Housing Finance Reform

The National Association of Home Builders (NAHB) isn't waiting for politicos in Washington D.C. to revamp the federal government's housing finance system.

It has its own idea for transitioning Fannie Mae and Freddie Mac to a new mortgage securitization system for single-family and multifamily conventional mortgages.

The aim is to keep the tap open on affordable housing credit.

NAHB Chairman Barry Rutenberg, a home builder from Gainesville, FL says that means a system of private, federal and state sources of housing capital to generate affordable fixed-rate mortgages, a menu of mortgage products for both single-family and multifamily housing, prudent underwriting standards and adequate oversight and regulation.

NAHB says during a phase-in period Fannie Mae and Freddie Mac would continue to operate but be phased out by private housing finance entities (HFEs) chartered to purchase single-family and multifamily mortgages from loan originators and package the loans into securities for sale to investors worldwide.

NAHB believes the 12 regional Federal Home Loan Banks could serve as HFE and the federal government would guarantee well-packaged, low-risk securities, rather than the mortgages.

Federal conventional mortgage support would consist of a privately funded insurance fund where the government would guarantee its solvency in a manner similar to the Federal Deposit Insurance Corporation's backing of the fund that insures savings deposits.

Under this system, mortgage originators would pay premiums to capitalize the insurance fund, which would cover losses and ensure full payment to investors. The federal government would be required to pay investors only if the insurance fund was depleted.

"The intent is for the government to be in a secondary position and to be the insurer of last resort in order to reduce the risk to taxpayers," said Rutenberg.

Other provisions in the NAHB housing finance plan include:

• NAHB believes reforms are needed in the system for rating mortgage-backed securities and is supporting the development of new securities ratings agencies that would use criteria developed by securities investors to assure objective evaluations and avoid conflicts of interest.

• The housing finance support roles of federal agencies, including Department of Housing and Urban Development, Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture and the Government National Mortgage Association (Ginnie Mae) would be preserved.

• State and local housing finance agencies (HFAs), as a source of housing funds, should have a more prominent housing finance role through the development of original programs for new homes and multifamily rental units involving partnering with federal and private providers of housing capital.

• Federal Home Loan Banks (FHLBanks) should continue their current activities to serve as an ongoing liquidity source for institutions providing housing credit. FHLBanks' mortgage purchase programs should be enhanced by allowing the banks to move beyond portfolio purchases to securitization.

• Continue and complete steps to close the gaps in standards and oversight that allowed and facilitated the improper and illegal activities in financial and mortgage markets.


Written by Broderick Perkins
April 2, 2012 Published by Realty Times

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Record Low Mortgage Rates Helping To Stir The Housing Market

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average 30-year and 15-year fixed-rate mortgage hitting new all-time record lows along with the 5-year ARM. The average 30-year fixed has been below 4.00 percent all but one week in 2012. The average 15-year fixed-rate mortgage has been below 3.00 percent for 8 consecutive weeks.

Freddie Mac's Chief Economist highlights how these record low mortgage rates are fueling housing demand in its July U.S. Economic and Housing Market Outlook.

30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.7 point for the week ending July 19, 2012, down from last week when it averaged 3.56 percent. Last year at this time, the 30-year FRM averaged 4.52 percent.

15-year FRM this week averaged 2.83 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.69 percent this week, with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.27 percent.

1-year Treasury-indexed ARM averaged 2.69 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.97 percent.

According to to Frank Nothaft, vice president and chief economist, Freddie Mac:

"With little signs of inflation and the Federal Reserve's "Operation Twist" keeping U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market. For instance, the 12-month growth rate in the core Consumer Price Index has been in a narrow 2.1 to 2.3 percent band over the past nine months ending in June. Meanwhile, new construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes. In fact, homebuilder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007."


July 20, 2012, Published by Realty Times

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Picking The Right Neighborhood

You're in the market to buy. You've probably given a lot of thought to the type of home you want as well as your budget and buying price range. There's an additional topic, though, that requires your careful consideration. Which neighborhood is right for you?

Neighborhoods vary as widely as the people that live within them. Some have diligent HOA's with strict rules of appearance and conduct, while others are more lax ... sometimes to the detriment of home values.

It's important to research the neighborhood where you're considering purchasing a home. You want an area that fits your needs, personality, and social habits. These factors can influence your overall happiness just as much as that updated master bath or outdoor kitchen.

First, consider the safety of a neighborhood. In many big cities you'll find more affluent neighborhoods adjacent to large strips of rental apartments or low-income housing. Now, this doesn't always present a problem, but it can mean a trickle over of petty crimes, such as vandalism and theft. Check with the local authorities to see crime rates for the neighborhood.

You may also want to check the national sex offender database to see if any offenders live in your new neighborhood. Again, there may be no need to have concern, but having all the facts can help you make a more educated decision.

Next, check out the lines for local school districts. Some neighborhoods may surprise you by which district they're in and that's a big deal for some families. You may already have children in a certain school and don't wish for a move to displace them.

You'll also want to see how far away amenities are. Do you want to be able to walk to shops and restaurants? Walkability is really important to some buyers. Others are happy when grocery stores and gas stations are just around the corner.

In order to properly access a neighborhood, you should be sure to gather the facts. Your real estate should have data on the most recent sales (comparables) in the area. This will help you see the latest trends in pricing. Are home prices dropping? If so, by how much? Is there a large percentage of distressed homes for sale in the neighborhood? This could signal a larger trend and indicate further median home value reductions in the future.

You can also get information from people that already live in the area. Take a walk or drive around your prospective neighborhood. Take a good, hard look at the state of repair of the homes and how good yard upkeep is. If you see someone out in their yard, don't hesitate to go introduce yourself.

You could say something like, "Hi! My name is X and I'm thinking of buying in this neighborhood. What do you think of this area?" If you're lucky you'll find a talker that can give you all the down and dirty details, from the neighbor that plays his music a little too loud to struggles with a picky HOA. They may also be able to answer questions about the social aspects of the community. Is this a neighborhood that has block parties, neighborhood watch meetings, and is friendly and social? Is this a place where people mostly keep to themselves?

Picking the right neighborhood is just as important as picking the right house.


Written by Carla Hill
June 27, 2012

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Buying a Condo

Buying and living in a condominium community has both benefits and drawbacks. This is why purchasing a unit in the right community for you is so important.

Condo communities can be as different as night and day. Some have strict rules, while others are lax in their enforcement.

Additionally, there are always variances in the costs associated with certain communities. Some have large monthly HOA fees. Others are minimal.

What sort of questions should you be asking your real estate agent and the local condo board? Let's find out.

First, you should find out about the financial health of the community. You'll want to see if there are adequate funds in reserve. A reserve fund is held for large future repairs, such as replacing roofs, drives, sidewalks, and pools. The condo board must be charging an adequate amount every month to keep this reserve fund in pace with inflation.

If a board hasn't been doing their due diligence you may be slapped with a big bill when a future repair needs to be made. This could range from the a few hundred to thousands of dollars.

Does this community allow you to rent out a unit? Sometime down the road you may find yourself wanting to move or rent out your unit, even to family. Many communities are very renter friendly and this will be no problem. Others strictly prohibit non-owner occupied units.

You'll also want to ask what the percentage of tenant-occupied units is. Is this a mostly rental-based community? This can bring with it the usual complaints of rentals. There may be less upkeep, more noise, and less of a sense of permanent community.

Along this same line of thought you should ask what the turnover rate is. Are residents settling in for years (an indication they like it there) or is this a community that sees people come and go?

Is the condo board involved in any sort of litigation at the moment, meaning are they being sued by a former resident? Conversely, is there any litigation they are pursuing against any current or past residents? These kinds of questions can give you a real feel for the tone of the community.

Finally, be sure to ask about the bylaws and restrictions of the property. You may have your heart set on having a garden or doing your own landscaping. The condo board may have other ideas. What if you want to make certain upgrades or improvements to your unit? Is this allowed? Be sure to ask for a copy of these bylaws and then have a professional look them over.

Living in a condo can be a wonderful experience. They can be tidy and low maintenance as well as a great social hub. Just be sure to do a little research when you're in the market to buy to be sure you purchase in the perfect community for you.


Written by Carla Hill
July 12, 2012

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Another Week Of Record-Breaking Lows For Fixed-Rate Mortgages

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average fixed mortgage rate continues to find new all-time record lows amid easing bond yields following June's lackluster employment report. Both the average 30-year and 15-year fixed-rate mortgage hit new lows. The average 30-year fixed has been below 4.00 percent for 16 weeks. The average 15-year fixed has been below 3.00 percent for 7 weeks.

30-year fixed-rate mortgage (FRM) averaged 3.56 percent with an average 0.7 point for the week ending July 12, 2012, down from last week when it averaged 3.62 percent. Last year at this time, the 30-year FRM averaged 4.51 percent.

15-year FRM this week averaged 2.86 percent with an average 0.7 point, down from last week when it averaged 2.89 percent. A year ago at this time, the 15-year FRM averaged 3.65 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.74 percent this week, with an average 0.6 point, down from last week when it averaged 2.79 percent. A year ago, the 5-year ARM averaged 3.29 percent.

1-year Treasury-indexed ARM averaged 2.69 percent this week with an average 0.4 point, up from last week when it averaged 2.68 percent. At this time last year, the 1-year ARM averaged 2.95 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Following a lackluster employment report for June, long-term U.S. Treasury bond yields eased somewhat this week allowing fixed mortgage rates to reach yet another record low. Only 80,000 net new jobs were added to the economy last month, not enough to lower the unemployment rate from 8.2 percent. This was the concern of the Federal Reserve's monetary policy meeting held June 19-20. Minutes released from that meeting on July 11, revealed that a few members felt further monetary stimulus was needed to promote satisfactory growth in employment to meet the Committee's goal."


July 13, 2012, Published by Realty Times

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Rent vs. Buy Decision More Than A Question of Affordability

Years ago, growing up with her parents in a single-family home in a Chicago suburb, Clarissa Mankus was infused with the American Dream

When it was time to leave the nest a few years back, Mankus purchased a condo, but homeownership quickly became her albatross, according to a story by Bill Glauber in the Milwaukee Journal Sentinel.

The Gen-Yer had tuition debt to pay and that meant being mobile, independent and ready to hit the road at any time.

After a few months as a homeowner, she unloaded the condo, moved in to a rental with a friend and regained control of her life, Glauber writes.

For a growing number of those seeking shelter, the affordability component of the rent-vs.-buy comparison takes a back to seat to finding housing that accommodates their lifestyle.

"For decades, Americans have scrimped and saved in order to buy that starter house and begin accruing equity. But do the same benefits of home ownership apply in every situation?" asks Dima Deych Marketing Director at Mayo Group, a Boston, MA-based real estate investment, development and management company.

Apparently not.

Deych says there are a host of considerations beyond affordability shelter seekers should consider before they buy or rent.

Location.Just as location is a factor in buying, where you rent is also key.

Buying a house in or near the downtown district of a large city is often more expensive than a suburban home. Because of the growth of the urban infill movement as well as space constraints that gave rise to high-density living years ago, apartments can be more readily available.

"Urban settings are seeing an influx of people who want to be able to live near work and the cultural attractions that you find in a big city," says John McGrail, CEO of Mayo Group.

Ease of relocation. A short-term or month-to-month rental contract is a lot easier to unload than it is to sell a property. What's more, if you sell a property too soon, given the time it takes to accrue equity these days, you could sell at a big loss.

If you are on a career track, planning to move back to your home town to be with family, or just need the flexibility to relocate, buying may not be for you.

Square footage. If you are on the go, career-wise, or just don't spend much time at home, are outdoorsy and travel frequently, a studio apartment or place to sleep may be all you need. If you don't spend much time in your house, a large space will be a waste of space and money.

Job security concerns. Without job security, you need the flexibility to relocate. A homeowner's worst nightmare is losing a job and not being able to quickly find another or being forced to relocate to find another job. In both cases, paying the mortgage or selling the home could be tough.

Defaulting on your mortgage can lead to foreclosure, wrecked credit and high blood pressure. If your employment is shaky, now's not the time to buy. Jobs are tough to come by.

The economy. The soft economy could impact your employment opportunities. It has also prompted lenders to tighten credit. Take a hard look at the local economy where you would like to buy. Renting in a recovering economy can give you time to save for a down payment and put yourself in the best position to buy.

Poor credit. If your credit is trashed, lenders won't approve a mortgage for you. A year or two renting and careful credit use can give you time to boost your credit score and position yourself as a strong homebuyer.

Maintenance. The best homeowners are do-it-yourselfers who don't have to call the plumber every time the sink stops up. In an apartment complex, even a single-family home you might rent, the landlord or property owner direct, or through the building manager or the superintendent, is typically responsible for maintenance.

Your relationship. If your relationship is young or on shaky ground, think about the consequences of buying a home with someone who may be out of the picture weeks, months or even years from now. If you're dependent on two incomes to make the mortgage payments, if there could be a court fight over assets if you split, renting is probably a better deal.

When you share assets in marriage or other relationships a prenuptial or other agreement also may be a good idea.


Written by Broderick Perkins
June 28, 2012 Published by Realty Times

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