Ed Bisquera

P.S. It's not entirely a case of worrying though; I priced out a loan for a client this morning and was at 5 % (5.13% APR), but conditions of loan applicant, loan to value, etc, were driving factors in still securing a competitive rate.

Simply quoting rates of the day is not a simple process, so consult with your mortgage consultant and give him/her ALL the details about your situation, because there are many factors to consider. :-) Have a great week!

P.S.S. What does this really mean for consumers that wait instead of locking in low rates, thinking 'but it might go lower' ? It MEANS THAT if you are waiting to lock in rates when rates are falling and thinking it will fall further, all the demand on the pricing while you're waiting, will most possibly cause rates to go back up, because of the supply and demand element. If it's a good deal, those that jump in earlier, rather than later, most likely will take advantage of the deal. Just my two cents... ;-)

NEW YORK, Jan. 22 /PRNewswire-FirstCall/ -- Mortgage rates increased after falling in each of the previous three weeks. According to Bankrate.com's weekly national survey, the average 30-year fixed mortgage rate is now 5.59 percent with an average of 0.3 discount and origination points.

The average 15-year fixed rate mortgage jumped to 5.2 percent and the average jumbo 30-year fixed rate climbed to 7.22 percent. Adjustable rate mortgages were mixed, with the average 1-year ARM sliding to 5.91 percent and the 5/1 ARM rising to 5.58 percent.

The reversal in mortgage rates was prompted by investors' nervousness about a large supply of government debt and renewed concerns about the health of banks. Higher yields on benchmark Treasury debt and wider mortgage credit spreads spelled an increase in mortgage rates versus one week ago. While mortgage rates remain historically low, the barrier for many homeowners is lack of equity. Similarly, a lack of downpayment could be a barrier to an otherwise well-qualified home buyer.

Lower mortgage rates have opened the door to refinancing for homeowners with equity. As recently as October, the average 30-year fixed mortgage rate was 6.77 percent, meaning a $200,000 loan would have carried a monthly payment of $1,299.86. With the average rate having since fallen to 5.59 percent, the monthly payment on a $200,000 loan is now $1,146.90.

SURVEY RESULTS

30-year fixed: 5.59% -- up from 5.28% last week (avg. points: 0.30)
15-year fixed: 5.20% -- up from 4.89% last week (avg. points: 0.37)
5/1 ARM: 5.58% -- up from 5.51% last week (avg. points: 0.38)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go tohttp://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. There is no firm conviction among the panelists this week, with 38 percent predicting that rates will remain more or less unchanged over the next 30 to 45 days. The remaining respondents are evenly split, with 31 forecasting higher rates and 31 percent expecting lower rates.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI

=== End of original post ===
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What Will Cause The Recession To End?

To understand what will cause the recession to end, we must understand what caused the recession. There were many causes, but the most visible culprit was an uncontrolled real estate boom. First it was the sub-prime crisis halting the boom. The government indicated that real estate would weather the crisis. Well, the real estate market did not weather the crisis. Then the government said the economy could weather the real estate crisis. As we pointed out in The Real Estate Report 12 months ago, as the real estate market goes, so does the economy. The housing industry directly or indirectly employs about one-fifth of Americans, depending upon how the numbers are counted. You can’t have a weak link in a chain which is that significant of a segment of the overall chain. Now the recession has spread across the globe because of the importance of our economy.

So, when will the recession end? The end of the weak real estate market will bring the end of the recession. Of course, it is likely that you will then ask us, when will the real estate market become strong again? Here we would suggest you look at the cost of ownership vs. the cost of renting. At the height of the boom, the cost of owning was significantly higher than the cost of renting–though some of these costs were masked by easy lending standards and innovative products. Now housing prices are going down and so are rates. There are already areas of the country that are reporting that owning is becoming cheaper than renting–especially after taxes are taken into consideration. When we reach this point in the majority of the country, the price of housing will stabilize. And when prices stabilize, banks will be more willing to lend. This cycle will lead us out of the morass. When will that happen? We wish we had a crystal ball, however, we do know that the lower rates go, the more quickly the date is likely to arrive.

The Markets. Mortgages continued their assault on record lows as they dropped for the 11th week in a row. Freddie Mac announced that for the week ending January 15, 30-year fixed rates averaged 4.96%, down from 5.01% the week before. The average for 15-year fixed rose slightly to 4.65%. Adjustables fell as well with the average for one-year adjustables decreasing to 4.89% and five-year adjustables falling sharply to 5.25%. A year ago 30-year fixed rates were at 5.69%. "Rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions," said Frank Nothaft, Freddie Mac vice president and chief economist. "So far, both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on rates for fixed-rate mortgages. The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008 announcement, to further shore up mortgage lending and keep rates low. In December, the unemployment rate rose to 7.2 percent, the highest since January 1993, and the economy lost 2.6 million jobs over 2008, the largest annual drop since 1945. That brought down yields on Treasury securities."

Current Indices For Adjustable Rate Mortgages
Updated January 16, 2009

	Daily Value	Monthly Value
	Jan 15	December
6-month Treasury Security	0.29%	0.26%
1-year Treasury Security	0.42%	0.49%
3-year Treasury Security	1.01%	1.07%
5-year Treasury Security	1.36%	1.52%
10-year Treasury Security	2.23%	2.42%
12-month LIBOR–WSJ		2.406% (Dec)
12-month MTA		1.823% (Dec)
11th District Cost of Funds		3.155% (Nov)
Prime Rate		3.25% (Dec)

House tax writers are proposing to make a first-time homebuyer tax credit more attractive to buyers and provide tax refunds for builders and certain financial institutions that have incurred large losses in 2008, but were profitable in past years. "This package was developed with strong coordination between the House and Senate leaders, president-elect Obama and his economic team," Rep. Rangel said. The tax package removes a repayment requirement on the $7,500 first-time homebuyer tax credit. But it does not increase the tax credit or expand it to all homebuyers as requested by the homebuilders and Realtors. These tax provisions and others will be included in the economic stimulus bill. If all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales, enough to meaningfully draw down excess housing inventory, the National Association of Realtors says. An evaluation of options for a home buyer tax credit by NAR shows wide ranging implications and benefits. A full credit to all buyers means an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four of those households would actually make a purchase. Source: National Mortgage News and NAR

When the National Association of Home Builders convenes its annual trade show in Las Vegas beginning Jan. 20, attendees will be considering many new trends in home design and amenities. Since 1992, the number of U.S. homes with porches and patios has doubled. New homes in warm climates are being built with courtyards that offer shelter and privacy while still offering an outdoor feel. With lots getting smaller, underground space is growing more valuable for everything from family rooms to “man caves” to underground garages. Great rooms continue to grow in importance, while formal living rooms grow ever more passé. In addition, there are no more offices in spare bedrooms. The latest is to have a separate space where the mobile workforce member can receive work-related visitors or seat assistants without traipsing these folks through the home. Finally, wider doors and first-floor masters help aging baby boomers stay home as they grow old.Source: Business Week

 

 

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When asked where they first learned about the home they purchased, 34% of buyers said a real-estate agent; 32% cited the internet; 15% said from yard signs; 7% said from a friend, neighbor or relative; 7% said home builders; 3% said from a print or newspaper ad; 2% learned directly from the seller; and 1% from a home book or magazine.

Though the internet was the most popular source, buyers also cited information from real-estate agents (85%), yard signs (62%), open houses (48%) and print or newspaper ads (47%). Fewer buyers relied on home books or magazines, home builders, television, billboards and relocation companies, the study said.

When asked where they first learned about the home they purchased, 34% of buyers said a real-estate agent; 32% cited the internet; 15% said from yard signs; 7% said from a friend, neighbor or relative; 7% said home builders; 3% said from a print or newspaper ad; 2% learned directly from the seller; and 1% from a home book or magazine.

The NAR also found that 87% of home buyers used the internet to search for a home purchased through a real estate agent, in contrast with 72% of non-internet users who were more likely to purchase in a private transaction directly from a builder or from an owner they already knew.

Local metropolitan multiple-listing-service websites are the most popular internet information resources, consulted by 60% of buyers, followed by Realtor.com (48%), real-estate company sites (46%); real-estate agent websites (%); for-sale-by-owner sites (19%); and local newspaper sites (11%).

Other survey findings are detailed below.

First Time Home-Buyers Up Slightly

• First-time home buyers have risen in market share - to 41% of transations from 39% last year - and plan to own their homes for 10 years, up from seven years in 2007.
• The median age of first-time buyers is 30, down from 31 in 2007, and the median income was $60,600. The typical first-time buyer purchased a home costing $165,000.
• The typical repeat buyer is 47 years old, earned $88,200, purchased a home costing $236,000 and has plans to stay in that home for 10 years.

Downpayments on the Rise

• The median downpayment by first-time buyers was four percent, up from two percent in 2007.
• The number of buyers purchasing with no money down fell from 45% in 2007 to 34% in the current survey.
• Among first-time buyers who made a downpayment, 69% used savings and 26% received a gift from a friend or relative, typically from their parents. Another seven percent received a loan from a relative or friend, while 16% tapped into a 401(k) fund, stocks or bonds.
• 92% of buyers chose a fixed-rate mortgage.
• Repeat buyers made a median downpayment of 15% , but 10% paid cash for their property.

Buyers and Sellers Use Agents

• 81% of home buyers and 84% of sellers used a real-estate professional, comparable to 2007.
• Nearly nine out of 10 home buyers and sellers would definitely or probably use the same agent again or recommend him or her to others, consistent with 2007 .
• 38% of sellers found their agent as a result of a referral, while 26% used the agent in a previous home purchase. Similarly, 43% of buyers relied on referrals to find an agent, while 18% of repeat buyers used an agent from a previous transaction.
• Only one percent of sellers chose an agent based on his or her commission.
• 46% report that the real estate agent initiated a discussion of compensation, while 24% of sellers brought up the topic and the agent was willing to negotiate the commission or fee.
• 13% percent of sellers did not know commissions and fees are negotiable.
• The level of ‘for-sale-by-owner’ transactions was 13%, up slightly from a record-low market share of 12% in both 2007 and 2006. The level of homes sold without professional representation has trended lower since reaching a cyclical peak of 18% in 1997.
• Factoring out properties that were never placed on the open market, the actual number of homes sold without professional assistance is seven percent. This matches the results in the 2007 study and marks a downtrend from 10% sold on the open market in 2004.
• The median home price for sellers who used an agent was $211,000 vs. $153,000 for a home sold directly by an owner, though unassisted sellers were more likely live in rural areas or small towns where sellers are more likely to know potential buyers.
• The most difficult tasks reported by unrepresented sellers are selling within the planned length of time, getting the right price, preparing the home for sale, and understanding and performing paperwork.

Foreclosure Purchases Higher

• The percentage of buyers who purchased a home in foreclosure jumped to six percent of transactions in the 2008 survey, from one percent in 2007.
• Another 38% of buyers considered purchasing of a home in foreclosure but did not, primarily because they could not find the right home.

Features and Incentives Up

• Environmentally friendly features were cited as desirable by 90% of buyers. Heating and cooling costs were of primary importance, followed by energy efficient appliances and energy efficient lighting
• 42% of sellers offered incentives to attract buyers, such as assistance with closing costs or home warranty policies.

Additional Demographic Information

• The median age of home sellers was 47 and median income was $91,000.
• 61% of buyers are married couples, 20% are single women, 10% single men, 7% unmarried couples and two percent fall into other categories.
• 26% of buyers are non-white, nine percent were born outside of the US, and four percent primarily speak a language other than English.
• 78% of all respondents purchased a detached single-family home, 9 percent a condo, 8 percent a townhouse or rowhouse, and 5 percent some other kind of housing.
• 55% of all homes purchased were in a suburb or subdivision, 17% were in an urban area, 16% in a small town, 10% in a rural area and two percent in a resort or recreation area. The median distance from the previous residence was 12 miles.
• The typical home sold for 96% of the listing price, and 86% of sellers were satisfied with the selling process.
• 52% of sellers were trading up to a larger home, while 22% were downsizing.
• Overall, buyers searched a median of 10 weeks and viewed 10 homes.
• Nearly nine out of 10 people consider their home a good investment, and almost half see it as a better investment than stocks.
• 15% of buyers own two or more homes.

About the study: The 2008 National Association of Realtors Profile of Home Buyers and Sellers is the latest in a series of large national NAR surveys evaluating demographics, marketing, preferences and experiences of home buyers and sellers. NAR mailed an eight-page questionnaire in August 2008 to a national sample of 133,000 home buyers and sellers who purchased their homes between July 2007 and June 2008, according to county records. There were 10,053 usable responses and the adjusted response rate was 7.9%. All information is characteristic of the 12-month period ending in June 2008 with the exception of income data, which are for 2007. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.

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