Another record low for mortgage rates
NEW YORK (CNNMoney) -- Mortgage interest rates hit new lows this week as both the 30-year and the 15-year fixed-rates fell, according to a weekly survey by Freddie Mac. It was the second consecutive week that rates broke records.
The 30-year, the most popular mortgage product, fell by 0.01 percentage points to 3.83%. Last year at this time, it stood at 4.63%. The new lows can save borrowers $46 a month for every $100,000 borrowed. Over a 30-year term that comes to more than $16,000.
The 15-year fixed dropped by 0.02 percentage points to 3.03%, lowering borrowing costs to $692 a month for every $100,000 borrowed, a $38 savings compared with a year earlier. Borrowers would pay out only $24,565 in interest over the life of the loan.
Rates are tracking the downward trend in Treasury yields, according to Frank Nothaft, Freddie's chief economist, which have fallen in response to election results in Europe and a weaker than expected U.S. employment report.
"The economy added just 115,000 jobs, below the market consensus forecast and less than in March," he said. "And although the unemployment rate declined, it reflected fewer people actively seeking jobs."
Mortgage rates will likely not fall much further, according to Bob Walters, the chief economist for Quicken Loans. The low rates have sparked refinancings, which have accounted for upwards of 70% of all mortgage applications lately.
That flood of refinancings strain the capacities of mortgage lenders, especially since many have exited the industry over the past few years. When the remaining banks have trouble handling all the applications, they raise rates to discourage any more.
That means that when Treasury yields rise again, mortgage rates will follow at a slower rate, said Walters. Fewer homeowners will seek to refinance their loans and the banks will be better able to handle the lower number of applications.
"The spread between yields and rates will reduce when capacity comes into line," he said.
Posted at 01:18PM May 10, 2012 by Lori Kehoe in General | Comments[0]
6 ways to get a great mortgage deal
(MONEY Magazine) -- Finding an affordable house is no longer a problem but qualifying for a mortgage can be. Six tips to getting a mortgage and a good rate.
Put your credit on ice. The higher your credit score, the lower your rate: The best rates go to those with a 760 or more, says credit-score expert John Ulzheimer.
So keep that plastic in your wallet (and don't apply for new cards or other loans) for at least three months before you go loan shopping. One large balance -- even if it's paid off at the end of the month -- can ding your score by 20 points or more.
Ask for time. Most sales contracts give you only 10 days to nab a loan or the seller can move on. Negotiate for an additional five to 10 days to give you some room to shop around.
So keep that plastic in your wallet (and don't apply for new cards or other loans) for at least three months before you go loan shopping. One large balance -- even if it's paid off at the end of the month -- can ding your score by 20 points or more.
Ask for time. Most sales contracts give you only 10 days to nab a loan or the seller can move on. Negotiate for an additional five to 10 days to give you some room to shop around.
Get at least six quotes. Rates on a 30-year fixed conforming loan can vary at least as much as a quarter of a percentage point. Get quotes from national lenders at mortgagemarvel.com and find out what your local credit union or regional bank is offering as well. Inquire about fees; while lenders aren't required to give you a good-faith estimate of closing costs (which average 2% of the loan balance) until you actually apply, some will provide it if you ask.
Match the lock period to the loan. You now need 60 days or more to close a loan, says Wharton professor and mortgage expert Jack Guttentag of mtgprofessor.com, and getting an extension on a lock will cost at least a couple hundred dollars. Ask your lender how long it's taking to close loans like yours -- and don't lock for less.
Get at least six quotes. Rates on a 30-year fixed conforming loan can vary at least as much as a quarter of a percentage point. Get quotes from national lenders at mortgagemarvel.com and find out what your local credit union or regional bank is offering as well. Inquire about fees; while lenders aren't required to give you a good-faith estimate of closing costs (which average 2% of the loan balance) until you actually apply, some will provide it if you ask.
Match the lock period to the loan. You now need 60 days or more to close a loan, says Wharton professor and mortgage expert Jack Guttentag of mtgprofessor.com, and getting an extension on a lock will cost at least a couple hundred dollars. Ask your lender how long it's taking to close loans like yours -- and don't lock for less.
Opt for an ARM. If you know you're not going to be in a house for more than seven years, adjustable-rate mortgages can mean big savings, says Guttentag. The monthly payment on a $300,000, seven-year ARM at the recent rate of 3.23% is $1,302, vs. $1,455 for a 30-year fixed at 4.13%. Opt for an ARM. If you know you're not going to be in a house for more than seven years, adjustable-rate mortgages can mean big savings, says Guttentag. The monthly payment on a $300,000, seven-year ARM at the recent rate of 3.23% is $1,302, vs. $1,455 for a 30-year fixed at 4.13%.
Talk to a broker. Those who need a jumbo loan or have an unusual situation (say, you're self-employed) will get the best deal from a mortgage broker who has access to and experience with a lot of lenders. Find a fee-only one at upfrontmortgagebrokers.org. Talk to a broker. Those who need a jumbo loan or have an unusual situation (say, you're self-employed) will get the best deal from a mortgage broker who has access to and experience with a lot of lenders. Find a fee-only one at upfrontmortgagebrokers.org.
Posted at 09:42AM Apr 30, 2012 by Lori Kehoe in General | Comments[0]
Close to bottoming, home prices may rise in 2013
"This gradual healing is encouraging, but we must tread carefully as the housing market is still far from a robust recovery," Michelle Meyer, an economist at Bank of America Merrill Lynch in New York.
Posted at 08:24AM Apr 16, 2012 by Lori Kehoe in General | Comments[0]
15-year mortgage rate hits record low
"On a more positive note, the Federal Reserve reported hiring was steady, or showed a modest increase, across many of its districts in its April 11 Beige Book of regional economic conditions," Nothaft said.
Posted at 11:36AM Apr 13, 2012 by Lori Kehoe in General | Comments[0]
Remodeling? How to get a better bid
(MONEY Magazine) -- Budgeting for a large remodeling project presents a bit of a chicken-and-egg problem: You won't have a feel for the cost until you get bids from contractors.
But unless you give pros a ballpark figure from the start, they'll have to guess at what to include in their bids -- and they'll come back to you with a huge range of prices for very different plans.
"A faucet can cost $200 to $900, a window can be $400 to $1,200," says Madison contractor Mike Gasch. "I need to know where to aim."
To solve this conundrum, do some calculations first.
1. Start with average costs |
When insurance companies need to pinpoint construction costs, they multiply the length by the width of the space and then multiply that by the project's typical cost per square foot.
Albert Paxton, an estimator who provides such data to claims adjusters and contractors, pegs average per-square-foot costs of remodeling jobs at this:
- Kitchen: $174
- Powder room: $133
- Master bathroom: $160
- Family room: $92
2. Tweak to fit the scope
These numbers are for gut remodels, meaning the room is demolished right down to the framing and rebuilt.
"A faucet can cost $200 to $900, a window can be $400 to $1,200," says Madison contractor Mike Gasch. "I need to know where to aim."
To solve this conundrum, do some calculations first.
1. Start with average costs |
When insurance companies need to pinpoint construction costs, they multiply the length by the width of the space and then multiply that by the project's typical cost per square foot.
Albert Paxton, an estimator who provides such data to claims adjusters and contractors, pegs average per-square-foot costs of remodeling jobs at this:
- Kitchen: $174
- Powder room: $133
- Master bathroom: $160
- Family room: $92
2. Tweak to fit the scope
These numbers are for gut remodels, meaning the room is demolished right down to the framing and rebuilt.
With a less involved project -- in the kitchen, say, you might be refacing the cabinets and replacing the countertops and appliances instead of tearing out everything -- cut your number by about 30%, says Paxton.
For a cosmetic update, as in fresh paint on the cabinets plus new lighting and hardware, reduce it by about 60%.
3. Adjust for your location
A plumber working in Manhattan might charge twice the hourly rate of one in Statesboro, Ga.
Same goes for everyone from laborers to architects. In a metro area along the Northeast or Pacific seaboards, add 30% to 40% (use your judgment about your market). In a rural area, especially in the South or Midwest, drop it by 15% to 20%.
4. Modify for style
These figures assume you're buying mid-range fixtures and finishes. If you're going upscale, as in granite countertops and stainless-steel appliances, or stone bathroom tiles and a separate soaking tub and walk-in shower, raise your number by 30% to 40%, depending on how elaborate you're getting. For an economy job, say at a rental property, cut it by 25%.
With a less involved project -- in the kitchen, say, you might be refacing the cabinets and replacing the countertops and appliances instead of tearing out everything -- cut your number by about 30%, says Paxton.
For a cosmetic update, as in fresh paint on the cabinets plus new lighting and hardware, reduce it by about 60%.
3. Adjust for your location
A plumber working in Manhattan might charge twice the hourly rate of one in Statesboro, Ga.
Same goes for everyone from laborers to architects. In a metro area along the Northeast or Pacific seaboards, add 30% to 40% (use your judgment about your market). In a rural area, especially in the South or Midwest, drop it by 15% to 20%.
4. Modify for style
These figures assume you're buying mid-range fixtures and finishes. If you're going upscale, as in granite countertops and stainless-steel appliances, or stone bathroom tiles and a separate soaking tub and walk-in shower, raise your number by 30% to 40%, depending on how elaborate you're getting. For an economy job, say at a rental property, cut it by 25%.
Make your number fit your finances by adjusting items 2 and 4, then be upfront about your bottom line with contractors who look at the job.
"If I have a good feel for your budget," says Cambridge, Mass., contractor Charlie Allen, "I can deliver maximum value within your financing."
Make your number fit your finances by adjusting items 2 and 4, then be upfront about your bottom line with contractors who look at the job.
"If I have a good feel for your budget," says Cambridge, Mass., contractor Charlie Allen, "I can deliver maximum value within your financing."
Posted at 08:19AM Apr 09, 2012 by Lori Kehoe in General | Comments[0]
Home prices fall to 2002 levels
NEW YORK (CNNMoney) -- The housing market started the new year with a thud. Home prices dropped for the fifth consecutive month in January, reaching their lowest point since the end of 2002.
The average home sold in that month lost 0.8% of its value, compared with a month earlier, and prices were down 3.8% from 12 months earlier, according to the S&P/Case-Shiller home price index of 20 major markets.
Home prices have fallen a whopping 34.4% from the peak set in July 2006.
"Despite some positive economic signs, home prices continued to drop," said David Blitzer, spokesman for S&P. "Eight cities -- Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa -- made new lows."
Only three of the 20 index cities registered gains in January, led by Phoenix, which climbed 0.9% month-over-month, Washington, up 0.7%, and Miami, which edged 0.6% higher.
Housing market indicators have sent confusing signals so far this year, with existing home sales and new home sales down month-over-month in February, but up year-over-year.
Potential homebuyers lack confidence in the market, according to Michael Feder, CEO of Radar Logic, an analytics company that produces daily spot prices for real estate. A big problem looming is a massive number of potential foreclosures.
"People see that there are millions of homes underwater, and at elevated risk of foreclosure, and conclude that housing values are unlikely to appreciate in any meaningful way for many years," he said.
On the other hand, home builders have turned more bullish and are gearing up for more new construction. Mortgage rates are also still very favorable and the economy is getting better with hiring on the rise.
Ken H. Johnson, a real estate professor at Florida International University, thinks all these factors are helping the housing market turn around, but the recovery will take time.
"The housing market is like a large cruise ship that turns slowly, often temporarily losing ground due to currents and change in momentum," he said. "While the ship is turning, drags on the housing market are also present and must be addressed before a full recovery is accomplished."
Feder said there is some evidence that the housing market recovery is approaching. One clue is that regular sales, as opposed to bank sales of foreclosed homes, increased dramatically over the past few months.
That indicates that sellers have capitulated to the lower sales prices of foreclosures and have adjusted their expectations of the prices their homes can command in the market.
He called that a good thing, because it means the market bottom is near. Once it does turn, there could be a rapid increase in buying, said Feder, as there is a much pent-up demand for homes.
Despite the market current turmoil, home ownership is still the goal of most Americans, according to a survey released Tuesday by Fannie Mae.
It found that while financial constraints and employment concerns are keeping homebuyers on the sidelines right now, two-thirds of renters say they intend to buy someday.
"Some Americans may not be financially positioned to own a home in the near future," said Doug Duncan, chief economist for Fannie Mae.
"But they may begin to revisit that aspiration as employment and household balance sheets improve over the coming years," he said
Posted at 09:05AM Apr 06, 2012 by Lori Kehoe in General | Comments[0]
Mortgage rate jumps past 4%
NEW YORK (CNNMoney) -- After many recent weeks where mortgage rates hit record lows, the 30-year rate jumped this week to its highest level since late October.
The 30-year fixed-rate mortgage, a popular choice for most homebuyers, hit 4.08%, according to Freddie Mac's weekly survey. That's 0.16 percentage points higher than a week earlier and its first time over the 4% mark since October.
The average rate for a 15-year loan also climbed, to 3.30% from 3.16% last week.
The 30-year rate has occupied a very narrow range for months, varying only between 3.87% and 3.98% all this year. Historically low mortgage rates have been a bright spot for buyers in a troubled housing market.
"A strengthening economy has pushed mortgage rates up a little bit," said Keith Gumbinger, vice president of HSH.com, a mortgage information company. "We've moved off the absolute rock-bottom lows of the past few months to a slightly higher level."
Freddie Mac's chief economist, Frank Nothaft, attributed the increase tobond yields rising over the past two weeks after a more upbeat assessment of the economy by the Federal Reserve, better-than-expected results of commercial bank stress tests and the likelihood of a second bailout for Greece.
Even after the rise, mortgages are still cheap. The increases add less than $10 to the monthly mortgage payment for every $100,000 borrowed.
Posted at 11:26AM Apr 02, 2012 by Lori Kehoe in General | Comments[0]
9 remodeling tips to make your home feel bigger
(MONEY Magazine) -- You don't have to be underwater on your mortgage to feel trapped in your home.
Now may be a less than ideal time to put a house on the market or to take on big debt -- icing your plans to trade up or build an addition anytime soon. But that doesn't mean you're stuck living in an uncomfortable home.
For a few hundred to a few thousand dollars, you can make your place "live" bigger without actually making it bigger, says architect Sarah Susanka, a small-space specialist and author of "Not So Big Remodeling."
Call it thinking inside the box; here are nine creative solutions for cramped homes.
1. Multitask the dining room ...
Cost: $500 to $2,000
If you have an eat-in kitchen, your dining room is probably used for special occasions only.
"Why have a prime spot sit vacant except for two or three holidays a year?" says Susanka.
Housing: The one bailout America could really use
Use it every day as an office or homework room without giving up dinner-party capabilities. Install doors ($300 to $500 each, with labor); add shelves or a cabinet for supplies; and invest in fitted pads to protect the tabletop.
For more flexibility, try a table like homedecorator.com's $629 Mission Table Cabinet, a sideboard that -- amazingly -- telescopes into a full-size dining table.
2. ... and the guest room
Cost: $100 to $3,000
Stop dedicating a whole room to infrequent out-of-town visitors.
With a decent air mattress, futon, or pull-out couch, you can lose the spare bed and use the room for day-to-day needs. (If you go with an air mattress, make sure to choose one with a built-in reversible motor to simplify the inflating and deflating.)
Add furniture, and what was only a guest room can double as a media or game room or home office.
3. Add a powder room
Cost: $3,000 to $6,000
Adding a first-floor powder room is simple if you have an unfinished basement or crawlspace for running the new pipes. Look for an existing room -- a coat closet, say -- and you won't have to build walls.
To save more, forgo the tile. The minimum space required by code is typically 2½ by 4½ feet, but you can often get an exemption to go even smaller.
4. Build a home office closet
Cost: $100 to $3,000
If your family is already bursting the seams of your abode, a home office might seem out of the question. But every household needs at least a small desk for paying bills and to anchor a wireless Internet system -- and you can often fit it all in a closet or armoire.
At its simplest, all you need are five or six deep, sturdy shelves made from wood or a composite product, which can total less than $40 at a home center. In a closet, set the lowest shelf at 30 inches high so you can wheel up a chair.
5. Bring the laundry upstairs
Cost: $5,000 to $7,000
Hiking up and down the stairs with laundry is enough to make anyone wish she could trade up. Instead, just move the machines.
Today's full-size high-efficiency washers and dryers are all designed to stack. You can steal the space -- a little more than four square feet -- from a closet, hallway, or nook.
You'll need to run new pipes and wiring, so being near an existing bathroom helps keep costs down, says Raleigh, N.C., architect Tina Govan. Make sure to include a drain pan to collect overflows or spills.
6. Open the floor plan
Cost: $2,000 to $4,000
A choppy layout of undersize rooms can make any house feel claustrophobic.
"People like the look of older homes, but not the way they function," says Seattle architect Thomas Lawrence.
To open your floor plan without major expense, remove doors from rooms that don't need them. Interior walls can come out for $2,000 to $4,000, unless they support the building or contain pipes -- in which case a window or pass-through may be a more feasible solution.
7. Use built-ins to replace a closet
Cost: $4,500 to $6,000
If you choose to eliminate a closet to expand or enhance your living space, create some built-ins to get back the lost storage. A run of four- to 10-inch-deep shelving along a wall has almost no effect on the size of a room, says Corvalis, Ore., architect Lori Stephens.
And it can handle many times the capacity of a closet. You might spend $4,000 removing the closet and another $2,000 on new built-in cabinetry, or just $500 if you use assemble-it-yourself home-center cabinetry, such as the Billy collection from Ikea.
8. Build a bump-out
Cost: $6,000 to $12,000
Another trick to expand a home without a full-blown addition is called a bump-out. You hang extra space off the side of the house, sort of like an oversize bay window.
For a few hundred to a few thousand dollars, you can make your place "live" bigger without actually making it bigger, says architect Sarah Susanka, a small-space specialist and author of "Not So Big Remodeling."
Call it thinking inside the box; here are nine creative solutions for cramped homes.
1. Multitask the dining room ...
Cost: $500 to $2,000
If you have an eat-in kitchen, your dining room is probably used for special occasions only.
"Why have a prime spot sit vacant except for two or three holidays a year?" says Susanka.
Housing: The one bailout America could really use
Use it every day as an office or homework room without giving up dinner-party capabilities. Install doors ($300 to $500 each, with labor); add shelves or a cabinet for supplies; and invest in fitted pads to protect the tabletop.
For more flexibility, try a table like homedecorator.com's $629 Mission Table Cabinet, a sideboard that -- amazingly -- telescopes into a full-size dining table.
2. ... and the guest room
Cost: $100 to $3,000
Stop dedicating a whole room to infrequent out-of-town visitors.
With a decent air mattress, futon, or pull-out couch, you can lose the spare bed and use the room for day-to-day needs. (If you go with an air mattress, make sure to choose one with a built-in reversible motor to simplify the inflating and deflating.)
Add furniture, and what was only a guest room can double as a media or game room or home office.
3. Add a powder room
Cost: $3,000 to $6,000
Adding a first-floor powder room is simple if you have an unfinished basement or crawlspace for running the new pipes. Look for an existing room -- a coat closet, say -- and you won't have to build walls.
To save more, forgo the tile. The minimum space required by code is typically 2½ by 4½ feet, but you can often get an exemption to go even smaller.
4. Build a home office closet
Cost: $100 to $3,000
If your family is already bursting the seams of your abode, a home office might seem out of the question. But every household needs at least a small desk for paying bills and to anchor a wireless Internet system -- and you can often fit it all in a closet or armoire.
At its simplest, all you need are five or six deep, sturdy shelves made from wood or a composite product, which can total less than $40 at a home center. In a closet, set the lowest shelf at 30 inches high so you can wheel up a chair.
5. Bring the laundry upstairs
Cost: $5,000 to $7,000
Hiking up and down the stairs with laundry is enough to make anyone wish she could trade up. Instead, just move the machines.
Today's full-size high-efficiency washers and dryers are all designed to stack. You can steal the space -- a little more than four square feet -- from a closet, hallway, or nook.
You'll need to run new pipes and wiring, so being near an existing bathroom helps keep costs down, says Raleigh, N.C., architect Tina Govan. Make sure to include a drain pan to collect overflows or spills.
6. Open the floor plan
Cost: $2,000 to $4,000
A choppy layout of undersize rooms can make any house feel claustrophobic.
"People like the look of older homes, but not the way they function," says Seattle architect Thomas Lawrence.
To open your floor plan without major expense, remove doors from rooms that don't need them. Interior walls can come out for $2,000 to $4,000, unless they support the building or contain pipes -- in which case a window or pass-through may be a more feasible solution.
7. Use built-ins to replace a closet
Cost: $4,500 to $6,000
If you choose to eliminate a closet to expand or enhance your living space, create some built-ins to get back the lost storage. A run of four- to 10-inch-deep shelving along a wall has almost no effect on the size of a room, says Corvalis, Ore., architect Lori Stephens.
And it can handle many times the capacity of a closet. You might spend $4,000 removing the closet and another $2,000 on new built-in cabinetry, or just $500 if you use assemble-it-yourself home-center cabinetry, such as the Billy collection from Ikea.
8. Build a bump-out
Cost: $6,000 to $12,000
Another trick to expand a home without a full-blown addition is called a bump-out. You hang extra space off the side of the house, sort of like an oversize bay window.
Structurally, it can't extend more than about three feet from the existing exterior wall, but it can run nearly the whole length of the building -- enough space to add an eating area to your kitchen or a closet to your master bedroom suite.
Because there's no foundation work, a bump-out costs about $150 a square foot -- or just $100 if you can tuck it under an existing roof overhang.
9. Finish non-living spaces
Cost: $15,000 to $30,000
Send your questions to The Help Desk
Converting a full-height basement or garage into living space gets you an addition at half price. You'll need a floor, ceiling, walls and more, but no structural work, no foundation, and no roof, so it'll cost $50 to $100 a square foot -- vs. about $200 for a true addition.
Attics are fair game, too, but more complicated because you may need to add a stairway and probably extend the plumbing, heating, and cooling systems a flight up. Doing all that brings the cost to around $150 a square foot.
Structurally, it can't extend more than about three feet from the existing exterior wall, but it can run nearly the whole length of the building -- enough space to add an eating area to your kitchen or a closet to your master bedroom suite.
Because there's no foundation work, a bump-out costs about $150 a square foot -- or just $100 if you can tuck it under an existing roof overhang.
9. Finish non-living spaces
Cost: $15,000 to $30,000
Converting a full-height basement or garage into living space gets you an addition at half price. You'll need a floor, ceiling, walls and more, but no structural work, no foundation, and no roof, so it'll cost $50 to $100 a square foot -- vs. about $200 for a true addition.
Attics are fair game, too, but more complicated because you may need to add a stairway and probably extend the plumbing, heating, and cooling systems a flight up. Doing all that brings the cost to around $150 a square foot.
Posted at 08:21AM Mar 19, 2012 by Lori Kehoe in General | Comments[0]
Home buying: Most affordable in decades
NEW YORK (CNNMoney) -- Buying a home is now more affordable than it has been in the last twenty years. Thanks to continued declines in home prices and rock-bottom mortgage rates, the National Association of Home Builders/Wells Fargo Housing Opportunity Index hit a record level of affordability. ccording to the index, 75.9% of all new and existing homes sold during the three months ended Dec. 31 could have been comfortably purchased by families earning the national median income of $64,200. That was the highest percentage recorded in the 20-year history of the index, and a sharp increase from just three months earlier when 72.9% of all homes sold were considered affordable. Unfortunately, being able to afford a home and actually being able to buy one are two different matters entirely. According to Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla., potential home buyers are still finding it difficult to land mortgages. "While today's report indicates that home ownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting home buyers and builders remain significant obstacles to many potential home sales," he said. Those who do land a mortgage, will be able to take advantage of rates thatseem to hit a new low every week. This week interest rates for 30-year loans averaged a record low of 3.87%, according to Freddie Mac. Youngstown, Ohio is the most affordable major metro area in the nation to buy a home, according to the NAHB. The faded steel town, located in eastern Ohio, could be on the verge of an economic renaissance with new gas drilling techniques that could help exploit nearby gas reserves, according to the report. There, 95.1% of homes sold during the quarter were deemed affordable to typical local households earning the area's median family income of $54,900. The other metro areas near the top of the list included Lakeland, Fla., Modesto, Calif., Harrisburg, Pa., and Toledo, OhioMortgages are cheap but you can't get one
Among small housing markets, Kokomo, Ind. had the highest housing affordability index with more than 99% of all homes sold there affordable to typical families. Fairbanks, Alaska, Cumberland, Md., Lima, Ohio, andRockford, Ill. were all very affordable as well. New Yorkers could only shake their heads at the housing opportunities available outside their metro area. Just 29% of the homes sold in the New York metro area during the last three months of 2011 were affordable for the typical local family. That's the lowest level in the U.S. -- even though locals typically earned $67,400, roughly $3,000 more than the national median. It was New York's 15th consecutive quarter as the least affordable metro area.
Posted at 08:20AM Feb 20, 2012 by Lori Kehoe in General | Comments[0]
New home construction starts strong in 2012
NEW YORK (CNNMoney) -- New home construction got off to a strong start for the year, with housing starts and building permits rising in January on a monthly and annual basis -- another sign that the U.S. housing market and broader economy are headed in the right direction. The Census Bureau reported that housing starts rose to an annual rate of 699,000, up 1.5% from December. Compared to a year ago, housing starts were almost 10% higher. Building permits, which are less affected by weather than starts, came in at a 676,000 annual rate in January, up 0.7% from the prior month and 19% from a year earlier. Results were also better thanindustry expectations. A consensus of industry experts from Briefing.com had forecast starts of 671,000 and permits of 675,000. Housing completions fell to an annual rate of 530,000 in January, however, a drop of 12% compared to December, but up more than 4% from a year earlier. "Along with the overall positive tides seen recently in the economy, it looks as if residential building is starting to follow suit," said Mike Lubansky, senior financial analyst at Sageworks. "Although residential building still has a steep hill to climb in order to achieve a full recovery to pre-2007 levels, it does look to be on the right trajectory." For a full-blown recovery, experts say good news needs to continue out of the job market. So far, the unemployment rate has dropped for five straight months, and now stands at 8.3%, the lowest since February 2009.
Initial claims for unemployment benefits have also been falling. On Thursday, a government report showed that the number of Americans filing for jobless claims plunged to the lowest level in nearly four years.
"Today's data are further proof that the recovery solidified in late 2011, and that momentum has carried forward into 2012," said Gus Faucher, senior economist at PNC Financial Services Group. "More importantly, the likelihood of an even stronger recovery is growing."
He added that a continued pick-up in job growth this year could support faster consumer spending growth and a stronger rebound in housing. But, he added, the financial crisis in Europe remains the largest downside risk.
Posted at 09:45AM Feb 16, 2012 by Lori Kehoe in General | Comments[0]
Mortgage rates cling to record lows this week
The average rate on the 30-year fixed mortgage stayed at a record low this week, providing some added incentive for those looking to buy a home or refinance. Mortgage buyer Freddie Mac says the rate on the 30-year loan was unchanged at 3.87 percent. The average on the 15-year fixed mortgage rose to 3.16 percent, up from last week's record low of 3.14 percent. Records for mortgage rates date back to the 1950s. Still, low rates have done little to boost the struggling housing market. Rates have been below 5 percent for all but two weeks in the past year. Yet few people can qualify to buy a home or refinance. Many of those who can have already done so.
Posted at 08:59AM Feb 13, 2012 by Lori Kehoe in General | Comments[0]
Ways to Woo Your Valentine
Flowers, chocolate, stuffed bears... you know the drill. Each Valentine's Day drug stores and retail stores become flooded with useless tokens of love at equally obnoxious dollar amounts and we buy into it every time. But it doesn't have to be that way! Here are a few great ways to woo your sweetie on Valentine's Day around the house in a more practical sense. Tackle a project. Make a DIY Valentine. Make a getaway. No matter what you do, the important thing to remember is that you're building a life and a home together. Every day should be as lovey-dovey as Valentine's Day. Being intentional about expressing your affection is very important and can be fun and practical, too. Good luck!
Every couple has them - a pile of home improvement projects stacked sky-high. There needs to be shelves in the bathroom. The den needs to be repainted. The kitchen cabinets need new knobs. One day, encourage your mate to go out and have a day to themselves - shopping, going to the movies, hanging out with friends, whatever he or she would prefer. Then, take one project off your shared to-do list and knock it out by yourself (or, perhaps, accompanied by a couple of your buddies.) When your sweetheart comes home, he or she will be so excited that you took the initiative and put forth so much effort to making your home together that much more homey.
As sweet as chocolates and stuffed animals and flowers can be, they are so over. Anyone can stop by the store and pick up a bear and a rose. But a do-it-yourself Valentine is sure to steal your lover's heart. Who knows - it may become a piece of art that hangs in your home for years to come! You can paint an old piece of wood or put something together with construction paper. If it's made with love, it will undoubtedly be received with love and probably won't end up in the thrift store donation bag in a year like that generic stuffed teddy.
When all else fails, steal your sweetie away for a weekend of isolation. A change of scenery is always helpful to ignite the fires of passion. Plus, if the house is a wreck, removing yourselves from that situation will give you a renewed sense of peace and relaxation.
Posted at 07:29AM Feb 09, 2012 by Lori Kehoe in General | Comments[0]
Hot start: Dow, Standard & Poor's have best January since 1997
NEW YORK – It's the best start for stocks in 15 years.
In what was mostly a slow and steady climb, the Dow Jones industrial average rose 3.4% in January and the Standard & Poor's 500 gained 4.4%, the best performances for both indexes to open a year since 1997.
Investors were encouraged by modest but welcome improvement in the U.S. economy, including an 8.5% unemployment rate, the lowest in almost three years. Corporate profits didn't wow anyone — except Apple's — but they were good enough.
"I don't see anything really glamorous or tremendous about the economy or earnings," Harris said. "But I think they're very acceptable, and things are grinding along."
An unexpected drop in consumer confidence dragged stocks down on the final day of the month. The Dow average finished down 20.81 points, or 0.2% at 12,632.91.
On Tuesday, the Dow started the day up 66 points after encouraging signs from Europe that Greece might finally complete a deal to cut its crushing debt, a step toward securing a critical €130 billion bailout payment.
Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity.
Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal's borrowing costs have risen to record highs.
Back home in the United States, investors have enjoyed a steady climb through January amid signs of an improving economy. Unemployment has fallen from a 10% peak in October 2009 to 8.5% last month.
The Dow lost its gains after the Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. Economists had expected 68.
There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.
Eight of the 10 major categories in the S&P 500 were lower for the day. Telecommunications stocks and financial stocks managed small gains.
Stocks rose in Europe on Tuesday on hopes the continent is making progress in its fight to contain the debt crisis, but they lost some of their shine after a run of soft U.S. economic data.
Sentiment in the first half of the day in Europe was buoyant after European leaders agreed the broad outlines of a deal to tie the countries that use the euro closer together and on hopes that Greece is close to a debt-reduction deal with private creditors.
Late Monday, following the agreement by a large majority of countries in the European Union to sign a new treaty designed to stop overspending, Greece's Prime Minister Lucas Papademos indicated that progress was being made.
Though Greece remains the epicenter of Europe's debt crisis, leaders are pushing ahead with other plans to tie economies together. Only Britain and the Czech Republicopted out of signing the new treaty, commonly known as the fiscal compact, which is meant to make it more difficult for countries to run up massive debts, like the ones now roiling the 17-nation eurozone.
The hope among participants is that the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control. For now, investors appear to be giving European policymakers the benefit of the doubt, especially as there are hopes a second bailout of Greece will be agreed alongside a debt-reduction deal between the country and its private creditors, possibly as soon as this week.
In London, the FTSE 100 index of leading British shares was up 0.2% at 5,681.61 while Germany's DAX rose 0.2% to 6,458.91. The CAC-40 in France was 1% higher at 3,298,55.
The more skittish mood in markets was evident in the performance of the euro, which was down at $1.31, having earlier traded above $1.32. The euro often garners support when investors look to take on more risk.
Europe's debt woes remain the main worry in the markets. A growing fear is that Portugal may also need to get private creditors to reduce their debts, even though Europe's leaders say Greece's debt-reduction deal is a one-off. Portugal's borrowing costs have been rising consistently to record highs over recent days as the economy shows few signs of improving.
Posted at 08:39AM Feb 03, 2012 by Lori Kehoe in General | Comments[0]
The american dream is still alive!
In 2000 (a very normal housing year without a bubble), with virtually no discussion of it in the media or in the academic community, 67 percent of Americans lived as a homeowning household. Then came the easy credit conditions which fueled home buying beyond normal and the ownership rate rose to 69 percent. But the subsequent bust brought the ownership rate down to today’s 66 percent. Not all age groups had similar experiences throughout this cycle. The very young were mildly impacted. The very old did not on average feel any pain – at least according to the statistics, though no doubt there were some retirees who painfully lost a home to a foreclosure. The big impact was felt among people in their 30’s, who have much the same homeownership rate today as back in 2000, well before the bubble. It is also this group where there is potential for re-entering into the homeownership market in the near future. Also note the general higher ownership rate as people get older and more mature and presumably become more responsible. Note the very high ownership rate among the 65-and-over population, who would have for the large part already paid off their mortgages.
Posted at 09:43AM Jan 31, 2012 by Lori Kehoe in General | Comments[0]
New home construction gathers momentum
New home construction slowed slightly in December after a strong November showing, but was still much more active than a year earlier.
Posted at 07:51AM Jan 26, 2012 by Lori Kehoe in General | Comments[0]
