Provo #2 Of The Top 10 Mid-sized Markets for the Good Life

Top 10 Mid-sized Markets for the Good Life

Business Web site Portfolio.com has identified what it considers the best mid-sized markets.

The study compared 109 communities with populations between 250,000 and 750,000 in 20 categories, including healthy economies, moderate costs of living, light traffic, pleasant neighborhoods, and good schools.

Portfolio.com’s Editor J. Jennings Moss said, "This companion study of best mid-sized places to live can serve as a resource for those who are trying to start a business in new territories by identifying the categories that define the best qualities of living.”

These were the top-10 mid-sized metros with the best quality of life:

1. Boulder, Colo.
2. Provo, Utah
3. Fort Collins, Colo.
4. Madison, Wis.
5. Ogden, Utah
6. Holland, Mich.
7. Colorado Springs, Colo.
8. Ann Arbor, Mich.
9. Des Moines, Iowa
10. Manchester, N.H.

Source: Portfolio.com (06/30/2010)

Three Things Condo Buyers Should Know

Three Things Condo Buyers Should Know

Now could be a great time for home buyers to find a great deal on a condominium.

Here are three things that potential buyers of condos should consider:

1. Is this condo likely to fall further in price? Part of the answer is in falling or rising local inventory – even if sales have picked up recently.

2. Is this a fair price? Condo prices are more volatile than single-family homes. One big consideration is whether buyers in this particular complex are likely to be able to qualify for a mortgage. If the complex has too many renters, for instance, the Federal Housing Administration won’t approve loans to buy units.

3. Is the condo association in good fiscal shape? Are they maintaining the grounds and the amenities as well as staying on top of needed structural improvements?

Source: Money Magazine, Beth Braverman (06/29/2010)

Mortgage Rates Hit an All-Time Low

Mortgage Rates Hit an All-Time Low

Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac.

Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.

Source: Washington Post, Dina ElBoghdady (06/25/10)

Fed: Interest Rates to Stay at Record Low Levels

Fed: Interest Rates to Stay at Record Low Levels

In the wake of a slowing real estate market, the Federal Reserve said Wednesday that the economy is “proceeding” and pledged to hold interest rates at record low, near zero rates.

One piece of good news, released simultaneously with the Fed’s report, was a survey of CEOs of large U.S. companies, 39 percent of whom said they expect to increase the number of people on their payrolls in the second half of 2010.

Source: Associated Press, Alan Zibel (06/23/2010)

Is a Housing Shortage Coming? Could We Be Moving Towards a Sellers Market?

Some experts are saying that the next big real estate problem could be a shortage of homes.

Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.

In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.

"The decline in household formation is artificial," says James Gaines, a real estate economist with Texas A&M. "The young are moving in with their parents. There's even doubling up among working-class people. There's a pent-up demand coming if and when the economy recovers."

Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand.

Source: CNNMoney.com, Les Christie (06/15/2010)

The Must-Haves In a Home for Men and Women

It’s true. Men aren’t looking for exactly the same things women are when they go home shopping.

ZipRealty surveyed 1,000 home shoppers and concluded that while about an equal number of men and women sought green features – about 27 percent – and 35 percent of both sexes put a high priority on a home office, there is disparity in the desire for other features.

Both sexes did agree on the biggest turn-offs: structural damage, bad odors, a busy street, and an awkward floor plan.

Here are the top 10 features most desired by men:
1. Garage or designated parking space, 85.5 percent
2. Master suite, 79.8 percent
3. Ample storage space, 71.2 percent
4. Guest bedroom, 70.2 percent
5. Large closets, 64.2 percent
6. Outdoor entertainment area, 63.4 percent
7. Gourmet or updated kitchen, 59.1 percent
8. Breakfast room or eat-in kitchen, 55.2 percent
9. View, 44.5 percent
10. Large yard, 43 percent

Here are the top 10 features most desired by women:
1. Garage or designated parking, 87.7 percent
2. Master suite, 77.8 percent
3. Ample storage space, 72.7 percent
4. Large closets, 68.7 percent
5. Outdoor entertainment area, 64.2 percent
6. Guest bedroom, 63.9 percent
7. Gourmet or updated kitchen, 61.8 percent
8. Breakfast room or eat-in kitchen, 56.1 percent
9. Large yard, 43 percent
10. Wood floors, 40.9 percent

Source: ZipRealty.com (06/10/2010)

Fewer Borrowers Fail to Pay Their Mortgages

Fewer Borrowers Fail to Pay Their Mortgages

The number of U.S. borrowers failing to pay their mortgages has fallen significantly in the last few months, according to RBS Securities Inc.

Of borrowers with subprime loans wrapped into bonds issued in 2007 who had never previously missed a payment, an average of 2.6 percent failed to pay at least once in March, April or May. That’s a drop from 3.7 percent in February and a 15 percent decline after seasonal adjustments, RBS calculates.

“We believe that the last few months’ performance points to a fundamentally positive shift in borrower behavior,” Paul Jablansky, Desmond Macauley, and Ying Wang, analysts at the Royal Bank of Scotland, wrote in a June 8 report.

Source: Bloomberg, Jody Shenn (06/10/2010)

Survey: Economists Forecast Growth

Survey: Economists Forecast Growth

Economists surveyed by The Wall Street Journal forecast slow but steady economic growth through the middle of 2011.

The key to economic growth will be increased employment, but economists say that the decrease in joblessness will be slow, falling from an employment rate of 9.7 percent now to 8.6 percent by the end of December 2011.

Meanwhile, Federal Reserve Chair Ben Bernanke, speaking to the U.S. House Budget Committee, wouldn’t deny the possibility of a double-dip recession, but he said that it appears to the Fed that “the recovery has made an important transition from being supported primarily by inventory dynamics and by fiscal policy toward a recovery being led more by private final demand."

Source: The Wall Street Journal, Phil Izzo (06/09/2010)

Will Technology Hurt Buy-Side Practitioners?

Will Technology Hurt Buy-Side Practitioners?

Visual marketing tools entrepreneur Alex Zoghlin, CEO of VHT Inc., asks real estate professionals a tough question: Do buy-side practitioners really deserve half of the commission paid by the seller if buyers are doing most of their research online?

“[Equally splitting the commission] worked great 15 years ago," Zoghlin says. However, he maintains that buy-side practitioners have been overshadowed by technology that leads sellers to properties and helps them make decisions.

VHT is testing a search-engine optimization platform that will allow a potential buyer to type a few key search terms — three bedrooms, big yard. The results that pop up will link to local real estate brokerages instead of aggregator site like Trulia or Zillow. The software also returns local results when an exact address is typed in.

Source: Chicago Tribune, Mary Ellen Podmolik (06/11/2010)

30- and 15-Year Rates Move Down

30- and 15-Year Rates Move Down

Home-mortgage rates fell this week along with bond yields, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.72 percent, down from 4.79 percent a week ago; while rates on 15-year fixed-rate mortgages fell to another record low of 4.17 percent from 4.2 percent.

Also, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.92 percent, down from 3.94 percent last week. Finally, one-year Treasury-indexed ARMs fell to a new six-year-low of 3.91 percent, compared with 3.95 percent a week ago.

Source: Wall Street Journal, Nathan Becker (06/11/10)

How to Buy a Home in Under an Hour...

How to Buy a Home in Under an Hour

The next technological trend in the real estate world will be the ability to buy property in little more than an hour, predicts Pat Lashinsky, CEO of ZipRealty.

Lashinsky foresees it working something like this:

1. A home shopper drives by a property and calls a practitioner on his cell phone.
2. The practitioner qualifies the buyer through banking contacts, then sends him an electronic key that allows him to tour the home.
3. An electronic tracking system monitors his tour while the practitioner answers questions via cell phone.
4. Closing will be managed through an electronic meeting.

Lashinsky believes the real estate industry has been slow to embrace change, but customers will demand it. “Those [practitioners] who don’t make it happen are going to fall by the wayside,” he says.

Source: Orange County Register, Jeff Collins (06/08/2010)

FHA Delinquencies Decline for Third Month

FHA Delinquencies Decline for Third Month

For the third consecutive month, the number of delinquent home mortgages insured by the Federal Housing Administration has declined.

The delinquency rate is still high – 8.5 percent in April – but that is down from 9.4 percent in January.

The FHA was unwilling to applaud this as good news. "We're not declaring victory by any stretch," says David Stevens, the FHA's commissioner. "There's plenty of room for caution."

But outside analysts were more positive. "It's a very important trend to the extent that we're not continuing to get worse," says Thomas Lawler, an independent housing economist in Leesburg, Va.

Source: The Wall Street Journal, Nick Timiraos (06/07/2010)

Mortgage Rates Close in on Record Lows but may not be Low for Long...

Mortgage Rates Close in on Record Lows but may not be Low for Long...

According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage averaged 4.78 percent for the week ending May 27, down from the week earlier when it averaged 4.84 percent.

Last year at this time, the 30-year rate averaged 4.91 percent. Rates have not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.

“These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively."

Nothaft says the latest information from Freddie Mac’s repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end.

Meaning the record-setting low mortgage rates may not be around long.

Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to raise key interest rates, driving up mortgages, said Stephen Stanley, chief economist at Pierpont Securities LLC.

The evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34 percent compared to a year ago, and Target Corp. reported its lowest delinquency rate in two years during the second quarter.

In another sign of economic improvement, fewer banks reported tightening lending standards this month, one reason consumer borrowing rose for the second time in three months.

“If lending standards start to stabilize, that’ll be another reason to remove the emergency measures, including the zero rate,” said Jay Bryson, a senior global economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who formerly worked at the Fed in Washington.

Source: Freddie Mac
Source: Bloomberg, By Bob Willis and Anthony Feld (05/28/2010)

Lock in Super Low Rates Today, Not Tomorrow

Borrowers eager to lock in a very low-rate mortgage should apply in the next day or two, says Bankrate.com mortgage analyst Holden Lewis.

Rates haven’t been this low since the 1950s, he says, adding that rates are unlikely to fall further.

“You can float, but that's not a smart strategy. It's like asking for another card when you have 19 in blackjack. Stand and take your chances,” he advises.

Source: Bankrate.com (5/26/10)

Salt Lake City ranked one of the most livable places in the country

Salt Lake City ranks high for health, livability

May 25th, 2010 @ 11:29am

SALT LAKE CITY -- Salt Lake City has been ranked as one of the most livable places in the country.

Business news site Portfolio.com ranks the Salt Lake metro area as the nation's fifth highest when it comes to quality of life.

Cities were ranked on the number of self-employed workers, education levels, traffic flow and population stability. Raleigh, N.C., claimed the top spot.

According to the report, "No market has a lower jobless rate for workers between the ages of 25 and 64 than Salt Lake City. Only Washington has a larger share of homes with at least nine rooms. One fifth of Salt Lake City's houses are that size."

Not only is Salt Lake livable, it's also healthy.

The American College of Sports Medicine's latest fitness index ranks Salt Lake No. 15 on a national list. That measure weighs factors such as exercise, smoking, disease rates, playgrounds, pools and other diversions that keep us outside for recreation.

Washington, D.C., earned top honors in that index.

Article published by KSL.com

Fewer Buyers Consider Foreclosures

Fewer Buyers Consider Foreclosures

Fewer U.S. homebuyers are interested in foreclosed properties than they were a year ago, according to a survey conducted for Trulia.com and RealtyTrac.

About 45 percent of U.S. adults age 18 say they are at least somewhat likely to consider purchasing a foreclosed home, down from 55 percent of people surveyed in May 2009.

Most home owners – 98 percent – expect to pay less for a foreclosure, but 36 percent expect a discount of 50 percent or more. Only 18 percent say they would be satisfied with a discount of less than 25 percent.

Some 92 percent of potential buyers were realistic about the likelihood that a foreclosed property will need improvements, but 65 percent wanted to spend less than 20 percent of the purchase price on fixing the place up.

Among U.S. adults who say they are at least somewhat likely to purchase a foreclosed home, 62 percent said they would use the property for their primary residence, 19 percent said they would use it as a rental investment, 8 percent said they would use it as a second home or vacation home, and 6 percent said they would buy and quickly resell.

Source: Trulia.com (05/20/2010)

Owners Think Their Home Value is Up

Half of Owners Think Their Home Value is Up

The confidence of U.S. home owners in the value of their homes increased in the first quarter, online home site Zillow says based on a survey it conducted.

About 50 percent of home owners surveyed by the Web site think their home's value declined in the past year, according to Zillow.com’s first quarter survey of home owner confidence. In contrast, Zillow thinks that 65 percent of U.S. homes actually declined in value based on its own calculations of value.

To the extent home owners are overconfident about the value of their home, Zillow says, they could feel encouraged to put their home on the market. If a lot of them did so and their home values aren't as high as they think they are, it could have the effect of pushing down prices, says Zillow’s Chief Economist Stan Humphries.

In its survey, Zillow found that 7 percent of home owners – or 5.3 million homes if the survey results were applied to all home owners – would be “very likely” to put their homes on the market in the next 12 months if they believed the market was improving. An additional 8 percent in the Zillow survey said they would be likely to list their homes, while another 14 percent would be somewhat likely.

Source: Zillow.com (05/20/2010)

Now is the Time to Buy...

Now is the Time to Buy, Investment Firm Says

When you compare the real estate downturn to the real estate market in the 1980s, Blumberg Capital Partners, which provides real estate investment management, finds similarities that lead the company to think now is an optimal time to buy.

Its analysts point out that the recession of the 1980s lasted 16 months, running from July 1981 to November 1982. Unemployment peaked in November of 1982 at 10.8 percent. From that point it took 38 months for the economy to recover fully and for unemployment to fall below 7 percent. It was another 10 months before unemployment was consistently below 7 percent.

Philip Blumberg, CEO of Blumberg Capital Partners, said in a note to investors that the real estate cycle is still three or four years from an optimal selling period, so now is the time for investors to buy.

Source: Blumberg Capital Partners (05/19/2010)

Total Foreclosures Fall

Total Foreclosures Fall, But REOs Rise

Foreclosure marketer RealtyTrac reported today that properties in all stages of foreclosure from default notices to auctions and repossessions were down 9 percent in April compared with March. They fell 2 percent compared with April 2009. Also, default notices were down 27 percent year over year.

RealtyTrac CEO James J. Saccacio predicted that foreclosures are plateauing, but won’t drop off dramatically any time soon. He pointed out that although default notices have dropped, repossessions are at a record level, indicating that banks are working through their backlogs.

Five states account for 52 percent of the total number of foreclosures: California, Florida, Michigan, Illinois, and Nevada. The states rounding out the top 10 are Arizona, Georgia, Texas, Ohio, and Virginia.

Source: RealtyTrac (05/13/2010)

Housing Starts Rise 5.8 Percent

Housing Starts Rise 5.8 Percent

Housing starts rose 5.8 percent in April to an annual rate of 672,000 units, the highest level since October 2008, the Commerce Department said Tuesday.

Single-family home starts rose 10.2 percent, while multifamily starts declined 18.6 percent, reversing the trend from previous months.

New building permits, a gauge of future activity, declined 11.5 percent to an annual rate of 606,000, the lowest level since October 2009, Commerce also reported.

Source: Reuters News, Lucia Mutikani (05/18/2010)

Forbes Ranks Provo UT #2 Best Place For Business And Careers

The top 5 most livable cities

3. Provo-Orem, Utah

Low unemployment rank: 22

Low crime rank: 11

Income growth rank: 1

Low cost-of-living rank: 76

Arts & leisure rank: 104

	Rank
Colleges1	113
Cost of Doing Business2	20
Cost of Living3	77
Crime Rate4	17
Culture and Leisure5	122
Economic Growth Projected7	21
Educational Attainment6	38
Income Growth*	1
Job Growth*	10
Job Growth Projected7	39
Net Migration*	39
Subprime Mortgages8	137
Education
College Attainment6	33.8%
High School Attainment	93.5%
Income
Median Household Income	$63,111
Income Growth*	5.2%
Employment
Job Growth*	2.1%
Job Growth Projected7	1.9%
Unemployment (2009)	5.3%
Housing
Subprime Mortgages8	13.7%
Median Home Price	$150,900

Realtors Pushes Back on Private Transfer Fees and Protecting Your Rights

Private transfer fees requiring sellers to pay a sum to developers — usually 0.5 percent to 1 percent of the sale price of a home — are meeting with increasing resistance around the country.

Gerry Allen, communications manager for the NATIONAL ASSOCIATION OF REALTORS® Community and Political Affairs group, told the State and Local Issues Committee Wednesday at the 2010 Midyear Legislative Meetings & Expo that eight states (Florida, Missouri, Kansas, Oregon, Arizona, Iowa, Maryland, and Utah) have passed laws banning the fees. Fourteen additional states have legislation pending that would prohibit the fees.

"We are on the front end of this issue," Allen says. "Our goal is to get legislation passed in all 50 states as soon as possible."

Transfer fees are different from transfer taxes paid to state and local governments. These fees are paid to private corporations or investors seeking to create a long-term revenue stream. In some cases, the fees are on the books for 99 years. Allen noted that the fees serve to “drive up the cost of housing.”

The NAR Board of Directors formally opposed the fees in 2008. Since then, the association has been offering technical assistance at no charge to state associations interested in introducing legislative bans on the use of the fees.

NAR has also sought and received clarification from the U.S. Department of Housing and Urban Development on its position on the use of private transfer fees for FHA-insured mortgages.

In April, HUD noted that such fees attached to a property insured by the FHA would be a violation of HUD regulations. NAR is awaiting word from the Federal Housing Finance Agency for clarification of its position on the use of the fees for Fannie Mae, Freddie Mac, and Federal Home Loan Bank mortgage purchases.

— Wendy Cole, REALTOR® Magazine

More People Living Under One Roof

The number of people sharing a home is rising, and that could cause the United States to end this decade with as many as 4 million more housing units than it needs.

In 2008, 49 million, or 16 percent of the population, live in a home with more than one adult generation, up from 28 million, or 12 percent, in 1980.

Three factors are driving this change, says Arthur C. Nelson, director of the Metropolitan Research Center at the University of Utah:

• More older adults moving in with their children or grandchildren.
• High unemployment keeping young adults from establishing their own households.
• Increasing numbers of immigrants who come from cultures where extended families living together is expected.

Will the change be permanent? Eric Belsky, executive director of the Joint Center for Housing Studies at Harvard, says it's anybody's guess. “There are so many conflicting piece of information,” he says.

Source: USA Today, Haya El Nasser (05/06/10)

Ruling Could Get Condo Buyers off the Hook

Condo buyers nationwide are watching a court case in suburban Washington, D.C., that could release them from their obligation to complete a transaction where the developer fails to live up to its original promises.

The law in question, the Interstate Land Sales Full Disclosure Act, or ILSA, requires developers of subdivisions with 100 or more units to provide buyers with a list of features and disclosures. If the developer fails to meet the requirements it has promised, buyers are entitled to back out of the deal and regain their deposits. The law was originally written to reduce fraud in situations like the sale of swampland in Florida.

The stumbling block for buyers has long been whether a development actually has 100 or more units. Earlier court cases have said that if fewer than 100 units were actually sold, the disclosure rules don’t apply. But the current case in suburban Virginia argues that if the developer intended to market 100 or more condos, the law applies, no matter how many are actually sold.

If the court sides with that interpretation, unhappy condo buyers all over the country could have an out. But some developers aren't too happy about the precedent the case would be setting.

Gary Barnett, CEO of Extell Development Co., which is embroiled in a similar dispute in New York, says, “Buyers are twisting a law intended for something completely different in an effort to obtain a terribly unfair result.”

Source: The Wall Street Journal, Robbie Whelan (05/11/2010)

propertytax.jpg Salt Lake City Council not ruling out property tax hike

May 3rd, 2010 @ 7:36am

SALT LAKE CITY (AP) -- The Salt Lake City Council says it isn't ruling out the possibility of a property-tax increase to fill an $18 million budget hole.

Council Chairman JT Martin says all options are on the table.

The comments come despite Mayor Ralph Becker's plans not to raise any taxes in his proposed $186 million budget. Becker's budget calls for service cuts and layoffs.

The council will spend the next six weeks completing a spending plan.

Becker consistently has vowed to avoid a tax hike, opting instead for fee increases and early retirement offers.

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Information from: The Salt Lake Tribune

Provo makes ‘Most Livable Cities' list

May 3rd, 2010 @ 3:34pm

SALT LAKE CITY -- Ogden and Provo have made the top of the list of America's Most Livable Cities.

The Utah college towns ranked No. 2 and No. 3 in a list of 200, compiled by Forbes magazine using data from the Bureau of Labor Statistics and crime reports. Pittsburgh, Pa., ranked No. 1 on the list.

Cities were ranked based on the last five years of income growth, current unemployment rates, cost of living, crime rates and arts and culture ratings.

30-Year Mortgage Rates Jump

Freddie Mac reports a jump in 30-year fixed mortgage interest to 5.21 percent for the week of April 8 from 5.08 percent the prior week. Rates are climbing now that the Federal Reserve has ended its campaign to lower borrowing costs and the economy is starting to pick up.

Here’s how other rates fared:

• The 15-year fixed rate climbed to 4.52 percent from 4.39 percent.
• The five-year adjustable rate rose to 4.25 percent from 4.1 percent.
• The one-year ARM edged up to 4.14 percent from 4.05 percent.

Source: Buffalo News, Alan Zibel (04/09/10)

Survey: Americans Prefer Owning Over Renting

Despite the challenges facing the housing market, 65 percent of Americans would still prefer to own a home rather than rent, according to a Fannie Mae national housing survey.

In addition, 43 percent of respondents cite safety as a key reason to buy, while 33 percent are motivated to buy because they perceive schools to be better in neighborhoods where most homes are owned by their residents.

The survey results released Tuesday show that both buyers and renters are more cautious than they used to be. About 23 percent of renters say they will buy a home, but later than they once hoped.

A full 70 percent said they believe buying a home continues to be one of the safest investments available. This compares to 74 percent who think putting money into a bank account is safe. Only 17 percent believe buying stocks is a safe investment.

Also, 60 percent believe that it will be harder for them to get a mortgage to purchase a home than it was for their parents.

Source: Fannie Mae National Housing Survey (04/06/2010)

Homebuyers scramble as mortgage rates rise

Homebuyers scramble as mortgage rates rise

Higher payments could price many would-be buyers out of the market

By ADRIAN SAINZ and ALAN ZIBEL

updated 2:50 p.m. MT, Wed., April 7, 2010

WASHINGTON - The era of record-low mortgage rates is over.

The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market — a threat to the fragile recovery in the housing market.

And if you wanted to refinance at a super-low rate, you may have missed your chance. Mortgages under 4 percent are still available, but only for loans that reset in five or seven years, probably to higher rates.

Story continues below ↓

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Rates are going up because of the improving economy and the end of a government push to make mortgages cheaper.

For people putting their homes on the market this spring, rising rates may actually be a good thing. Buyers are racing to complete their purchases and lock in something decent before rates go even higher.

"We are seeing some panic among potential buyers who have not found houses yet," said Craig Strent, co-founder of Apex Home Loans in Bethesda, Md. "They're saying: Man, I should have found a house three weeks ago or last month when rates are lower."

Decline in purchasing power
It's all about affordability. For every 1 percentage point rise in rates, 300,000 to 400,000 would-be buyers are priced out of the market in a given year, according to the National Association of Realtors.

The rule of thumb is that every 1 percentage point increase in mortgage rates reduces a buyer's purchasing power by about 10 percent.

For example, taking out a 30-year mortgage for $300,000 at a rate of 5 percent will cost you about $1,600 a month, not including taxes and insurance. But the same monthly payment at a rate of 6 percent will only get you a loan of $270,000.

Good economic news is the first reason rates are rising: U.S. government debt, a safe haven during the recession, is losing its appeal as investors turn to stocks and riskier corporate bonds.

Lower demand for debt means the government has to offer a better interest rate to sell its bonds. The yield on the 10-year Treasury note, which is closely tracked by mortgage rates, has hovered around 4 percent all week, the highest since June.

The second reason is the Federal Reserve. Last week, the Fed ended its program to push mortgage rates down by buying up mortgage-backed securities. When demand from the central bank was high, rates plummeted to about 4.7 percent for much of last year. And business boomed for mortgage lenders as homeowners raced to refinance out of adjustable-rate mortgages and into fixed loans.

As of Wednesday, the Mortgage Bankers Association put the national average for a 30-year fixed-rate mortgage at 5.31 percent. One week ago, it was 5.04 percent.

6 percent rates likely
Many analysts forecast rates will rise as high as 6 percent by early next year. If they go much higher, the already shaky housing recovery could stall. And that could slow the broader economic rebound.

In a normal market, with home prices steadily rising, a jump in rates doesn't cause a big dip in demand. That's because people know their homes will eventually rise in value, and are willing to accept a higher mortgage payment.

But now home prices are flat nationally and still falling in some places. Potential buyers are nervous about jumping in.

"In this environment, any rise in mortgage rates does significant damage because people don't think they're going to get their money back" if prices fall, said Mark Zandi, chief economist at Moody's Analytics.

For people who bought their first home in the 1980s, when rates stayed over 10 percent for several years, paying 6 percent for a home loan may seem like a steal. But it's coming as a shock to many first-time homebuyers this spring.

In Overland Park, Kan., Sirena Barlow checks mortgage rates online once a day. She's been shopping for a something around $130,000 and wants to sign a contract this month, to take advantage of a tax credit for first-time homebuyers.

Barlow, a legal assistant, has already told her landlord she's moving, so her stress level is high. Her real estate agent, Michael Maher, has been doing his best to calm Barlow and other clients, but rising rates are making them anxious.

"It's like giving hyperactive kids ice cream," he said. "It has really taken the ones who are focused on buying and amped them up a little bit."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Housing Experts Say Real Estate is Recovering

Some of the nation’s top economists believe the housing market has turned and better days are on the way for the housing industry.

Increases in jobs, credit, and affordable homes will overcome impediments such as rising interest rates, and the expiration of the Federal stimulus program to push the housing market toward recovery, says Dean Maki, chief U.S. economist for Barclays Capital.

“I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” says Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College.

“The underlying trend is turning positive,” says Bruce Kasman, chief economist at JPMorgan Chase & Co.

Source: Bloomberg, Kathleen M. Howley and Rich Miller (03/15/2010)

Fed Says Keeping Rates Low Is Key

The economy remains in a slump, motivating a Federal Reserve official, who is said to be President Obama’s favored candidate for vice chair of the Fed, to say that keeping interest rates at record-low levels is important.

Janet Yellen, head of the Federal Reserve Bank of San Francisco, said in a recent speech that the Fed remains committed to doing what’s necessary to hold down interest rates.

"Any significant run-up in mortgage rates would create risks for a housing recovery," she said.

Source: Associated Press, Jeannine Aversa (03/23/2010)

Greenspan: Housing Will Come Back

Former Federal Reserve Chair Alan Greenspan told officials in Mexico on Wednesday that he believes U.S. home prices have hit bottom. However, home owners are still unnerved by the decline in value, and until prices stabilize, the economy will remain weak.

"We will not be out of this crisis until home prices truly stabilize in the United States. They appear to have stabilized, but they are very fragile," Greenspan said in a televised interview.

"Eventually housing will come back; it can't get any lower," he added.

Source: Reuters News (03/25/2010)

A Good Time to Buy a High-End Home

I have just recently negotiated $200,000+ off the Purchase price for 2 of my High End Clients...

Some of the best housing deals are on high-end homes, many over $1 million. Some of them need TLC or they aren’t in the most-coveted locations. But there are plenty of desirable properties and lots of sellers who are getting impatient.

Buyers with cash have the best opportunities. Buyers who need a mortgage should move especially quickly. With the Federal Reserve ending its purchases of mortgage securities this month, the mortgage market is likely to rise from its current low level. Even if prices fall further, the rising cost of borrowing could eliminate any savings.

As Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, says, this is a "very good time to be a buyer at the high end."

Source: The Wall Street Journal, Nick Timiraos and James R. Hagerty (03/27/2010)

HOAs Can't Ban Sex Offenders

I feel that if the majority of the Planned Development votes to BAN Sex Offenders than the vote should be honored. What do you think?

Home Owner Associations or neighborhoods with deed covenants, conditions, and restrictions (CCRs) are unlikely to be successful in an effort to ban sex offenders from purchasing a home, says Charlotte, N.C., attorney Michael Hunter.

Hunter, who specializes in community and condominium association law, says adding such a restriction to bylaws or covenants would likely be found unenforceable by the courts and could expose the HOA or community organization to a civil rights claim.

The best way to deal with the issue, Hunter says, is to ensure that all residents are aware that a registered sex offender is residing in the community. The board should avoid identifying the sex offender by name or address because of potential liability in the event that a resident reacts irresponsibly.

Source: Charlotte Observer (03/27/2010)

Government Making it Harder for You to Buy Your New Home...

Whether your buying your first or new home today or a year from now, these changes will dramatically affect your ability do both...

The FHA's move to raise upfront mortgage insurance premiums takes effect next week, soon to be followed by a reduction in allowable seller concessions toward a borrower's closing costs.

Speaking to a Housing Financial Services subcommittee earlier in March, MBA President John Courson expressed concern that "this could be another policy change that would have an adverse effect on the population that traditionally has sought FHA's assistance to purchase a home." He added that the cut in seller concessions would largely affect low-to-moderate, first-time, and minority home buyers.

Source: Memphis Daily News, Eric Smith (03/30/10)

Mortgage Applications Hit 6-Month High

Our market is not slowing down, Prices are not dropping and more people are buying. Get Your new Home before you no longer can...

The volume of mortgage applications to purchase homes rose 6.8 percent last week compared to the previous week on an adjusted basis, according the weekly survey by the Mortgage Bankers Association.

On an unadjusted basis, purchase applications were also up 6.8 percent compared to the previous week and rose 9.3 percent compared to the same week a year ago. This is the largest number of applications since the week ending October 2009.

The number of applications to refinance declined 1.3 percent on an adjusted basis compared to the previous week, and the overall mortgage index increased an adjusted 1.3 percent. On an unadjusted basis, it was up 1.5 percent.

Mortgage rates were on the upswing:

· 30-year fixed-rate mortgages increased to 5.04 percent from 5.01 percent.
· 15-year fixed-rate mortgages increased to 4.34 percent from 4.33 percent.
· 1-year ARMs increased to 6.88 percent from 6.75 percent.

Source: Mortgage Bankers Association (03/31/2010)

Economists Give Housing Mixed Reviews. (Tell me what you think)?

Home prices that approach what they were before the bust are at least five years away, says Peter Morici, a University of Maryland professor of economics.

“I think we’ll see housing values rise 20 or 25 percent and then more gradual appreciation," Morici says.

The problem, he believes, is the oversupply of housing. “Supply is a couple of years ahead of demand,” he says.

Other housing observers were less optimistic. “Foreclosures are still going to bite the market. Given the preponderance of negative housing data, we may see another leg down,” says Joseph Brusuelas, president of Brusuelas Analytics.

What is your opinion?

Source: Bloomberg, Courtney Schlisserman (03/30/2010)

The New Face of House Flipping

Home flippers have their groove back, but this time around most of them are pros who are savvy enough to buy the right properties and turn them over quickly.

Nationally, the number of flipped homes rose 19 percent to 197,784 in 2009, according to RealtyTrac. Flipping has been encouraged by a Federal Housing Authority one-year rule change, which allows FHA borrowers to buy foreclosed homes from owners who have held title for less than 90 days.

Many of the today’s flippers are wealthy foreign investors from countries like Israel, Germany, and Spain. In many cases, they bid without ever seeing the properties, relying on services that checks titles and send drivers to properties to relay photos and descriptions via mobile phone to bidders.

Source: BusinessWeek, Prashant Gopal (03/31/2010)