Interesting Real Estate Reading,
...a Selection of Articles.

RISMEDIA, August 25, 2006

—Mortgage rates declined for the seventh time in the last eight weeks, aided by last week's better-than- expected reading on the Consumer Price Index. The average 30-year fixed rate mortgage fell to 6.48%, the lowest since March 29. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.32 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, dropped by a similar amount to 6.19%. On larger loans, the average jumbo 30- year fixed rate declined to 6.74%, Adjustable rate mortgages also backtracked. The average 5/1 adjustable rate mortgage slid to 6.24%, and the average one-year ARM retreated to 6.00%.

Although inflation remains a threat, bond investors are confident in the Fed's forecast that inflation will recede as the economy cools. Bond yields and fixed mortgage rates both reflect some concern on the part of investors that the economy will slow too much, causing the Fed to cut rates at a later date. Fixed mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates have fallen nearly one-half of a percentage point since the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93%, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.48%, the same loan originated today would carry a monthly payment of $1,040.74. With the recent pullback, fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.


Daily Real Estate News | August 23, 2006

NAR: Existing-Home Sales Down, Prices Soften

Existing-home sales were down in July, while home prices in many areas are slightly below year-ago levels, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 4.1 percent to a seasonally adjusted annual rate1 of 6.33 million units in July from a downwardly revised pace of 6.60 million June, and were 11.2 percent below the 7.13 million-unit level in July 2005.

David Lereah, NAR’s chief economist, says higher interest rates dampened sales but that price softening is good news for the housing market because it is drawing buyers.

“Many potential home buyers have been on the sidelines, some ‘kicking the tires,’ but mostly waiting for sellers to compromise on prices and terms,” he says. “Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise.”

The national median existing-home price for all housing types was $230,000 in July, up 0.9 percent from July 2005 when the median was $228,000. The median is a typical market price where half of the homes sold for more and half sold for less.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.76 percent in July, up from 6.68 percent in May; the rate was 5.70 percent in June 2005. Last week, the 30-year rate declined to 6.52 percent.

“An unexpected quarter-point drop in mortgage interest rates over the last month also could help to stimulate the housing market,” Lereah says.

NAR President Thomas M. Stevens from Vienna, Va., said most sellers continue to see excellent returns on their homes. “Considering that typical sellers have been in their home for six years, the average appreciation during that time is close to 60 percent,” said Stevens, senior vice president of NRT Inc. “This demonstrates the value of housing as a long-term investment – the longer you own, the better your return.”

Total housing inventory levels rose 3.2 percent at the end of July to 3.86 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.

Affordable Ways to Make a Home Sparkle

A home seller doesn’t have to spend a fortune on redecorating in order to impress buyers. But it does take a little creativity and a clear understanding of the main goal: to remove personal clutter and make everything else shine.

Here are a few simple (and affordable) suggestions for making a home more impressive to potential buyers: Outside: Spread fresh mulch on the flowerbeds; paint the front door; and buy a new "welcome" mat. The mudroom: Get rid of the litter box and the pet food bowls; put cleaning supplies out of sight; and hang coats in the closet, not on hooks. The bathroom: Hide personal items such as athlete’s foot powder or laxatives; put toothbrushes in the medicine cabinet; buy a new shower curtain. The closets: Ruthlessly thin out clothes and shoes; hang what’s left on matching hangars; and replace the light bulbs with 100 watts. The kitchen: Get rid of all but the basics in the cupboards and clean everything off the counters.

Source: Universal Press Syndicate, Michael Walsh (08/20/2006)

Daily Real Estate News | August 22, 2006

Added Incentive Could Mean a Faster Sale

A good home in good condition in a good neighborhood offered at a fair price will still sell in a reasonable amount of time.

But some owners want to offer a little extra incentive to ensure that their homes sell as quickly as possible. Here are some suggestions: Pay homeowners association fees for up to two years. Pay the buyer's home insurance for up to a year. Offer a bonus to the buyer's agent. Buy down the mortgage rate by a percentage point or two to lower the buyer's monthly payment. Pay closing costs. Replace all the appliances with new ones

Source: St. Petersburg Times, Judy Stark (08/19/06)

Contractor vs. Real Estate Agent - Tips On Buying the Right House

So, you've decided you want to buy a house. Congratulations! We realize you're probably ready to climb up on your Little Giant ladder system (you know, the one on the TV infomercial?) and shout it to the rooftops. First, do you want to build a new house from the ground up, or buy an existing one? For most of us, the dream is to build it ourselves; but unless you're Bob Vila or Norm Abrams, or a reasonable facsimile thereof, this isn't a realistic option. So what'll it be: an existing pre-owned, or brand-new from the ground up? What you choose depends on your comfort zone, but either way, life will suddenly get more interesting. So put away your Little Giant step ladder (for now anyway), you have a few decisions to make first.

Build that house!

Some of us thrive on dealing with contractors and builders, looking at small house plans and large, setting dates, making arrangements, choosing carpet and paint... and some of us don't. Frankly, it's easiest to get a realtor to help you find an existing home, old or new. On the other hand, buying a pre-owned home means having no say so in the building process. And therefore you take your chances with potential preexisting problems. If the idea of climbing onto your Little Giant ladder and directing the construction yourself appeals to you, then you're obviously the type who doesn't mind adding a little stress to your life (and a lot to the construction crew's). Once you decide to build, you'll have the thrill of making further decisions: whether to build in an existing development or on your own land, or buy a brand-new house prebuilt, or opt for one of those modular house plans, which can have you in your new digs in days. You may have to find and buy land, deal with architects and designers, pay for permits and inspections of all types, etc., etc. If you're the take-charge kind of person and you can afford it, then the decision is a no-brainer: build. The benefits are many, not least of which is that you can have it built exactly as you want it. A dream house must be built to your specs; it can rarely be bought. The same is true for those of us with special needs; it's usually easier to build a house with wheelchair ramps or space for a 10,000-gallon aquarium than it is to buy one.

Published with permission (FCDMInc)

Choose the Right Mortgage and Avoid Winding up in the Poor House

Homeownership can become a nightmare with a real estate loan that does not fit your needs. In fact, many consumers take on real estate purchase loans which are totally inappropriate and ones that may gradually increase the monthly payments beyond their comfort zone.
Some find themselves in a position where they are unable to enjoy going out because they did not consider the higher costs of home ownership.

For Instance, renters view buying a home as a way to replace their rent with a mortgage payment. They may forget that there are other costs of ownership that they had paid within their rent, such as real estate taxes, homeowners insurance, some utilities etc.
Renters also need to remember to include the cost of maintenance and repairs when creating a budget.

Moreover, some real estate buyers go for the lowest adjustable loans without realizing the rates are going to go up. Others take high interest rate seconds to avoid PMI and/or eliminate a normal down payment.

The key to picking the right mortgage comes with understanding your future needs. We all want the lowest payment, but getting it today may mean paying much more tomorrow.

Setting aside time to discuss your long term financial plans with an Elite Financial (California Only) representative or local banker, is a great first step for getting your real estate loan needs in line with your mortgage.
You may think you have the right loan today, not realizing the necessary flexibility it must have to fit your future. But if we can save you money and allow you to obtain a better product, then there is no better time than now to call and find out.

Elite Financial can be reached toll free at 800.908.5626