Mortgages Rates Lowest Since 1950s

Mortgages are cheaper today than they’ve been in a half-century. If only most people had the job security, the credit score and the cash to qualify.

The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddie Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.

Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.



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Where is Real Estate Headed?

Written by Phoebe Chongchua

Many have watched the real estate market with bated breath, wondering what lies ahead. The Norris Group, a California-based company that produces an annual report on the state of real estate and predictions, provides some insight. The company recently released the Tip of the Iceberg report by Bruce Norris, an active investor, hard money lender, and real estate educator with 29 years of experience. While the report focuses on California, there are many other national predictions included. Here’s a look at what Norris is predicting in the coming eight years.

“Real estate isn’t even the first domino. Everything that happens in real estate can happen because of other things,” Norris said at a conference earlier this year. In this report, I’m looking at all those other things and finally seeing that they play a big part, if not the biggest part, in how things work out,” said Norris.

The report shows the various government programs for delinquent and financially challenged homeowners and reveals a disturbing fact. “All the delinquency trends for all the types of loans are up,” said Norris. “It doesn’t matter if it’s prime or subprime.” “The national average is 13.2 percent for total non-current (both delinquencies and foreclosures). California ranks at 15 percent, Illinois at 14 percent, Pennsylvania at 10.7 percent, and Florida, the highest, at 23.5 percent. “My friend Alex lives in Florida in Orlando and houses that were selling for $180,000 to $220,000, he’s regularly buying for $20,000 to $22,000,” said Norris.

The national average for the total non-current FHA loans (including delinquencies and foreclosures) is 17.4 percent. California is at 9.7 percent, Illinois at 21.3 percent, Pennsylvania at 15.3 percent, and Florida is at 23.8 percent.

Norris thinks this will provoke more usage of the 203(k) Mortgage by HUD (U.S. Department of Housing and Urban Development). The “Streamline (K)” Limited Repair Program permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. “They’ll actually loan you more than the house is worth, intentionally,” said Norris. “Right now it’s only available for owner-occupants but I’m sure that’s about to change,” he said.

“All of us who thought that we were going to see REOs (real estate owned by lending institutions) all over the place for the last few years are quite surprised,” he said. “It’s because there was intervention.” But how will that intervention and the aging population impact us? The report states that having a Federal debt that is trillions of dollars (and growing) and the size of the baby boomer generation will cause big changes that affect finances and real estate. “You’re going to expect higher taxes,” he said. Norris predicts, maybe even up to 45 percent for top tax bracket in 2011 and possibly higher after that. “If we’re going to try to resolve some of our problems and pay for stuff that’s gone on in the past, I think you’re going to have to say ‘We’re going to have to pay some higher taxes.'” Norris also predicts higher unemployment, aging consumers buying less and saving more which he says will mean more burden on the government due to fewer tax revenues and greater expense for government.

Perhaps the good news is the prediction for consistently low interest rates. “This is one of the conclusions that I didn’t think I was going to come up with. I really thought that we’d probably have some scary interest rates but I just don’t think so. Without an overheated economy, I don’t see the big inflation risk for the next period of time. I see the big picture that it could be very scary but for the length of time that I’m trying to cover in this report, I’m not as afraid of it as I thought I’d be,” said Norris.

He thinks over the next eight years, interest rates will be under 8 percent “and you may have times where they are as cheap as they are now.” Norris anticipates milder price increases in real estate as well as a decline in ownership coupled with a constant inventory available. The report also points out something that buyers are already facing, “regulation of finance markets might make it harder to get finance.” He predicts the median price to increase for California to approximately $460,000 in the beginning of 2018 due to factors such as migration. And if the employment conditions improve in the state, Norris thinks migration numbers will do even better, helped in part due to retirees moving into the state. Norris expects more emphasis on housing for seniors, which seems to be a trend in many states.

“I view the next eight years as a pivotal time for us, as a country, to make sure that we don’t end with bigger problems than we’ve got,” said Norris.

The good news is that Norris predicts less volatility in the real estate market and expects increases, albeit, not as drastic as in the past.

– Copyright © 2010 Realty Times. All Rights Reserved.

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It’s a Good Time For a Home Inspection

Written by Broderick Perkins

In today’s housing market, a home inspection can wake up buyers to what “as is” really is and give them a negotiating edge that could lead to cash or repair concessions.

For sellers, a home inspection serves as an anti-haggling tool and keeps the dickering down to a roar.

An inspection is also for new homes, given new home defects aren’t just incidental.

It’s also a good tool to use to assess a home’s integrity after a natural disaster, including flooding, an earthquake, a wind or rain storm.

Finally, a home inspection by home owners who aren’t listing their home for sale can let them know every few years what maintenance or upgrades they need to perform.

It’s always a good time for a home inspection.

For $350 to $500, a professional home inspector will review the major, visible and accessible components of the home and provide a detailed written report rating each element. Typically included are the heating system; central air conditioning system (climate permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components.

The inspection isn’t intrusive and it may not include swimming pools, septic tanks, and other systems that require an inspection by a specialist.

The objective report should include detailed information in a way that allows the customer to make informed decisions about the findings.

The inspection also can be a learning opportunity for the buyer or seller who should attend the inspection. The inspection is an opportunity to see the inspector demonstrate systems and to get acquainted with necessary maintenance chores.

The inspection also sees through the veil of misleading staging and other cover-ups and it can help buyers uncover building permit and code violations.

Sellers can likewise use the inspection to determine what they need to do to put the home in competitive shape or price it fairly to sell as-is.

While a home inspection, purchased by the buyer or seller or both, is more common than it’s ever been, too many home buyers skip the process.

That’s especially true for new homes, but they also need a once over. There could be subcontractor issues missed by the contractor as well items missed by the local jurisdiction’s harried building inspector.

Studies have exposed newly built single family homes with construction problems related to the building envelope; framing and structural elements and in the plumbing and electrical systems.

As homes age, given the life expectancy of certain systems, the home inspection grows in importance.

Within 10 years, foundation settling could create drainage problems; by the age of 20, appliances are well outdated and the roof and wood components exposed the weather or moisture could need replacing; at 40 years the HVAC system will likely need replacement. Older historic or architecturally significant homes can develop structural problems and need restoration.

Safety hazards that crop up in older homes include old sliding glass windows that are not tempered safety glass, missing smoke alarms and missing pressure relief valves on water heaters.

Neglect plays a role too, as the lack of preventative maintenance takes it toll. Some homeowners take better care of their car than their biggest investment.

The American Society of Home Inspector’s (ASHI) “Virtual Home Inspection Tour” online ( can give you a sense of what a professional inspector sees, what areas he or she can’t see and won’t inspect and what the inspector is likely to find and where.

– Copyright © 2010 Realty Times. All Rights Reserved.

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Plenty of Reasons to Buy a Home Even After the Tax Credit

Written by Realty Times Staff

Even though the home buyer tax credit expired on April 30 and won’t be renewed, there may never be a better time to buy a home than today, according to the National Association of Home Builders (NAHB). Many outstanding opportunities still exist for home buyers, but they may not be around forever.

“The home buyer tax credit was just one of many factors motivating Americans to buy homes,” said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. “But buyers can still take advantage of today’s low interest rates and competitive prices to get a home they may not have been able to purchase just a few years ago.”

Besides mortgage interest rates that have been hovering at near-record lows, homes in many markets have become more affordable. Prices have moderated from the highs of the housing boom that occurred in most of the country, especially in major markets where they had increased significantly.

Today’s new homes are also built to be much more energy efficient than homes constructed a generation ago, making them more affordable to operate. New homes are designed to support modern lifestyles with open floorplans, flexible spaces, improved safety features, and low-maintenance materials.

Consumers who are thinking about buying a home should not count on interest rates or prices staying at current levels, however. Mortgage rates are sensitive to market conditions, and even a slight increase can push monthly payments beyond a family’s budget. As the country recovers from the recession and people stabilize their financial situations, NAHB economists expect that home prices will begin to increase by 2011.

NAHB’s home buyer brochure “Opportunity Knocks for Home Buyers” describes many of the opportunities in today’s market, as well as the long-term financial benefits of homeownership. It provides examples of how interest rates affect monthly mortgage payments and the typical federal tax savings over the first five years of homeownership. The brochure can be downloaded from NAHB’s web site at:

The home buyer tax credit is still available for eligible home buyers who had a signed sales contract by the April 30 deadline and who close by June 30, 2010, as well as for qualified members of the military, foreign service and intelligence communities, who have until April 30, 2011, to sign a contract.

– Copyright © 2010 Realty Times. All Rights Reserved.

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Seniors Looking to Downsize, Seek Opportunities to Socialize in Urban Areas

Written by Phoebe Chongchua

Aging baby boomers want to feel connected. As many decide to downgrade the size of their current home, they search for a new one. However, it’s more than just their living quarters that makes them want to buy.

“I think previously there was this preconceived idea that senior citizens retire and they move to Florida or Arizona or they move somewhere to a senior citizen community,” says Steve Matthews, a real estate industry expert and chair for the Montclair Senior Citizen Advisory Committee in New Jersey. But he says there’s a changing mindset emerging. “Senior citizens no longer want to be in an isolated place.”

Many are selling their homes and looking for a community connection in the location where they plan to purchase their next home. “Like the rest of America, there was this movement going out toward suburbia. Now, there’s a movement going back toward more urban areas and towns are starting to be challenged,” says Matthews.

His town, Montclair, is a 30 – minute train ride from New York City. “So, it becomes a commuter town for people who work and it’s always been known as a town where young families go and buy. But now we’re seeing seniors who would previously move down to South Jersey or move somewhere else, choosing to stay closer to home,” says Matthews.

And that means that towns like Montclair need to understand the changing needs of its residents.

There are multiple factors causing the desire for urban living. Extended family living under one roof and caring for each other, low – maintenance condos, and social connectivity are a few reasons that top the list.

“Towns aren’t used to having to provide other services for seniors. Many towns have always focused services toward children – school systems, park systems, and things like that. Now, towns are being challenged to provide support systems for seniors who are choosing to retire in place,” says Matthews.

As more seniors shop for smaller, easy – to – maintain homes, that puts them in the same market as first – time buyers. However, seniors often have one distinct purchasing advantage. “A lot of them are selling their home, so they’re cash buyers and that makes them a stronger buyer in this market,” says Matthews.

Some seniors tend to be interested in homes that are completely renovated or upgraded. But Matthews says he encourages seniors to look at homes that might need some remodeling because they may get a better deal. Then the buyers can renovate the home in a way that is most suitable for their needs.

For sellers looking to market their property, Matthews says there are some specific items that tend to appeal to this group such as, buildings with doormen and onsite maintenance staff, alternate transportation such as a senior shuttle or bus stop nearby, and ‘lock and leave’ homes (baby boomers are adventurous and like to have the ability to easily leave for travel). Studies show this group also likes smaller quarters. They’re willing to get rid of extra stuff and live freely, yet comfortably which is why condos, active adult communities, and city apartments are highly appealing.

According to the Over – 50 Council of the National Association of Home Builders, as much as 6 percent of people between the ages of 55 and 64, move every year.

– Copyright © 2010 Realty Times. All Rights Reserved.

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Common Buyer Fears

Written by Carla L. Davis

Whether you are a first time home buyer or someone who is looking to move up or down, getting into the market can be a fearful time.

Here are some of the most common buyer fears:

Do I have enough money to buy a home?

To first step to finding out how much home you can truly afford is to get pre-qualified for a mortgage.

Also, take a step back and look at your finances. Ideally, you should have around 20 percent of the purchase price to put down. You should also have less than a 36 percent debt to income ratio. Be sure to include all of your monthly obligations in that equation, including student loans, child support payments, alimony, car payments, credit cards, etc.

Once you’ve looked at your savings, make sure that apart from your down payment, you’ll have enough left over to pay closing costs, which include such things as attorney fees and transfer fees. The National Association of Realtors (NAR) reports that this amount averages between 2 and 7 percent of the home price. You also need to have money left as a cushion. What if unexpected repairs, either to your house or car, come up? What if you or a family member needs medical attention? Be sure that you have enough money leftover after the purchase to keep your life running smoothly.

Will I have buyer’s remorse?

There is no such thing as the perfect house, so you should prepare yourself for some mild feelings of “what if”. You may have to give up a few “wants” to get a few “needs” when you buy your next home. Or if this is your first purchase, you may have to buy something a little short of your dream house, and build equity in order to move up at a later date. Try not to lose sight of the big picture. This is a home that you own. You now get the benefits of tax breaks. You are building equity as you pay off the loan. And, hopefully, your home will appreciate in value over the coming years.

How can an unhandy owner handle repairs?

Before you swear off doing some of your own projects or repairs, know that everyone starts somewhere. Take a class at your local home improvement store, invest is a handyman’s guide, or ask a friend that has already tiled their bathroom or fixed a leaky sink to come and give you some pointers.

Be prepared for repairs, maintenance, and updates. Even with a new home, there will be projects. Plan accordingly financially. And if all else fails, hire a professional.

What if I need to move?

Experts recommends that to build equity, you need to have owned your home for at least 3 to 5 years. The NAR recommends, “Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.” If the time is less than five years, then you should be prepared to not make any money on the sale of your home, and even, to “lose” some — in the form of closing costs.

– Copyright © 2010 Realty Times. All Rights Reserved.

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Interest Rate Watch

U.S. averages as of April 30, 2010:

  • 30 yr. fixed: 5.06%
  • 15 yr. fixed: 4.39%
  • 1 yr. adj: 4.25%

– Copyright © 2010 Realty Times. All Rights Reserved.

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Five Key Areas to Pay Attention to When Buying a Home

Written by Carla Davis

Looking for a new home can be exciting and frustrating. You can help alleviate the frustration by paying close attention to five key areas of the homes you’re considering buying; it may save you money in the long run.

Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.


Walker says sometimes homeowners assume with newer homes that all will work just fine but that’s often not the case. “I inspected a brand new house—four years old but the electrical was all done incorrectly,” says Walker.

Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you’re browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.


Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. “It was a model home. What the homeowners did was plant trees for shade to make it look really nice, but they planted the wrong trees and they’re going to crack the foundation and it’s going to cut the property value down by $50,000,” says Walker.

Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. “As you walk through the house, 21 feet in and 30 feet deep, there’s just too much root invasion and it’s going to ruin their tile,” explains Walker.

He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, “which means the foundation is moving.”

However, just because you see cracks doesn’t mean there is a foundation problem. “Most people don’t understand that there are natural cracks in a house. That’s why when we do an inspection report we have to look at it and say ‘Okay, this is a typical crack and this one is an untypical crack,'” says Walker. He says some cracks may lead to other problems while others won’t.


Walker says another big area of concern is the plumbing. It’s an area that you can’t always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. “Mold forms underneath sinks when people have a leak and they fix the pipe but they don’t take care of the mold,” says Walker.

He says things like caulking the sink can help prevent mold. “That’s my number one thing I always find—bad sinks,” says Walker.

He says that when you look at the sink, look behind it and most of the time you will discover a little crack. “What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it’s in a perfect position to create mold,” says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.


“You can tell everything about the house by the attic,” says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. “In the attic you can tell where all the damage has been,” says Walker.

“If you’re in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced,” says Walker. He adds, “You can tell if the roof is good because you can look right at the wood.”


“There should not be moisture or plants next to your house,” says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.

Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.

– Copyright © 2010 Realty Times. All Rights Reserved.

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Homeowner Advice: Housewarming Party Etiquette

Written by Carla L. Davis

Buying a home can be the single largest purchase of a lifetime. And in our society, celebrating that purchase is a common and happy occurrence.

But questions arise as to what are the proper procedures and etiquette regarding a housewarming party. Can you throw the party yourself? Are gifts mandatory? When should the party happen? And can renters throw a housewarming party? These are a few of the questions that we’ll cover in this article.

The first tip from the experts is to wait to have your party until you are actually settled into the house. Sometimes new homeowners are so excited to share their new life that they jump the gun. You don’t want to be searching for a serving spoon or a mixing bowl when your guests are arriving. And you also don’t want them walking a maze around boxes and disorganized furniture.

The next consideration is who plays host and organizes the party? You should feel completely comfortable in hosting your own housewarming party, if done with the right intentions. Housewarming parties shouldn’t be done with the intention of getting gifts, just as a wedding shouldn’t take place in order to get presents. If there are items you’d like to have, you could consider registering for gifts. Gifts, however, should probably not be requested or suggested as mandatory. And registry information should not be included on the invitation. There will be guests who will bring offerings, regardless if you register, request, or not.

Along those same lines, if you have a good friend or family member that has settled into a new home, you may consider stepping up to the opportunity to play host. This should be considered an honor. Whoever plays host will send out invitations, or e-vites, and plan the festivities, including cocktail menu and food. A low key affair can be just as fun as something more involved. Consider throwing a fair weather barbecue as one option.

Should a renter have a housewarming party? Sometimes buying just isn’t in the cards. In this instance, it may be better to throw a simple party, without the pretenses of it being a housewarming party. Your friends and family can still bring gifts if they want, but without feeling the obligation of buying a present for a landmark experience.

What make a good housewarming present? This can be tough, especially if the host hasn’t registered for gifts or if you don’t know the host’s taste. Some great gifts that have a hard time going wrong are: candles, wine or champagne, potting sets (seeds, trowel, and pot), or even gift cards to local home stores and home improvement stores.

As a guest to a housewarming party, it would be good manners to gift the new homeowner. Even a simple gift like those outlined above would be perfectly suitable. If you can’t afford a gift at this time, consider writing a handwritten note congratulating the new homeowner.

A housewarming party is a great time to celebrate one of life’s greatest joys, owning a home

– Copyright © 2010 Realty Times. All Rights Reserved.

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