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.
Under the current $7,500 first-time home buyer tax credit, which must be repaid over 15 years, 264,000 households meet the purchase requirements. Using the same assumptions, with plans to hold their home for a median 10 years, it would mean only 66,000 additional sales.
Lawrence Yun, NAR chief economist, said NAR is advocating a tax credit for any home purchase meeting qualifying underwriting standards. “A home buyer incentive is critical to help reduce housing inventory and stabilize home prices,” he said. “The bigger the incentive, the faster housing can help pull the economy out of recession. The cost to the Treasury would be far less than the additional costs of a prolonged recession with insufficient housing stimulus.”
Analysis of other options shows that if only first-time buyers are eligible and the repayment feature is dropped, it could mean an additional 202,000 home sales. If extended to all home buyers but the repayment feature is retained, the gain would be 181,000 home sales.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said a flexible approach to the tax credit would have added benefits. “A home buyer tax credit also should be allowed to be used as a part of downpayment. This would instantly add an equity cushion for homeowners – a vested financial interest provides the foundation for sustainable homeownership, which helps improve economic stability,” he said.
NAR estimates only 25 percent of newly eligible households would become homeowners, and does not capture the effect of increased trade-up buying activity. As such, these projections may understate the full impact of a home buyer tax credit.
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Monday, January 19, 2009
Builders Opt to Downsize New Homes
The National Association of Home Builders (NAHB) reports a drop in home size to an average 2,438 square feet in last year's third quarter from 2,629 square feet in the second quarter.
NAHB research director Gopal Ahluwalia expects shrinking residence size to be a lasting trend, noting that consumers are more concerned about affordability and recognize that smaller households do not need large dwellings.
According to a January NAHB survey of builders, 89 percent have downsized their offerings. American Institute of Architects chief economist Kermit Baker attributes the trend to the weak economy, residential price declines, rising energy costs, and the perception that homes are no longer a good investment.
Source: Wendy Koch, USA Today (01/08/09)© Copyright 2009 Information Inc.
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NAHB research director Gopal Ahluwalia expects shrinking residence size to be a lasting trend, noting that consumers are more concerned about affordability and recognize that smaller households do not need large dwellings.
According to a January NAHB survey of builders, 89 percent have downsized their offerings. American Institute of Architects chief economist Kermit Baker attributes the trend to the weak economy, residential price declines, rising energy costs, and the perception that homes are no longer a good investment.
Source: Wendy Koch, USA Today (01/08/09)© Copyright 2009 Information Inc.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
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or visit www.WilsonRealtors.Net
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Visit www.WilsonWorksForYou.com to see what we can do for you!
30-Year Rates Fall Below 5 Percent
Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac.
Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Wednesday, January 14, 2009
Down Payment Assistance Bill
January 12, 2009
We have been informed that a bill to reinstate reformed downpayment assistance will be introduced as early as tomorrow. The bill is expected to be introduced by Congressman Al Green (TX) with bipartisan support. The bill will have the same language as unanimously passed last year by the House Financial Services Committee.
We will keep you informed as we continue to support efforts to reinstate downpayment assistance.
AmeriDream
"Doing things right for America's homebuyers"
We have been informed that a bill to reinstate reformed downpayment assistance will be introduced as early as tomorrow. The bill is expected to be introduced by Congressman Al Green (TX) with bipartisan support. The bill will have the same language as unanimously passed last year by the House Financial Services Committee.
We will keep you informed as we continue to support efforts to reinstate downpayment assistance.
AmeriDream
"Doing things right for America's homebuyers"
Tuesday, January 13, 2009
Obama: More Needed to Combat Foreclosures
President-elect Barack Obama said in an interview Sunday on ABC’s “This Week” that the government hasn’t done enough to prevent foreclosures.
"I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there," he said.
Meanwhile, Sen. Majority Leader Harry Reid said Sunday that Bush and Obama officials are near agreement on how the remaining $350 billion financial bailout funds should be used.
During the television interview, Obama said he had asked his economic team to develop a plan that would ensure greater openness about how the money is spent.
Source: The Associated Press, Philip Elliott (01/11/09)
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"I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there," he said.
Meanwhile, Sen. Majority Leader Harry Reid said Sunday that Bush and Obama officials are near agreement on how the remaining $350 billion financial bailout funds should be used.
During the television interview, Obama said he had asked his economic team to develop a plan that would ensure greater openness about how the money is spent.
Source: The Associated Press, Philip Elliott (01/11/09)
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Fed Official: Housing is Key to End Recession
While the current recession will be longer and more severe than predicted, housing will help lead the country out of the downturn, Boston Federal Reserve Bank President Eric Rosengren told the Massachusetts Mortgage Bankers Association at its annual meeting.Rosengren said the housing market could stabilize this year, which he sees as a prerequisite for recovery.
"The recent reductions in mortgage rates, in part due to monetary policy actions, have enabled more borrowers than would otherwise have done so to purchase or refinance homes," Rosengren said.
"Expansion of this effort and encouraging greater [Fannie Mae and Freddie Mac] participation, should encourage borrowers who have equity and reasonable credit scores to purchase or refinance homes," he added.
Once the market stabilizes, mortgage securitization should be restructured to prevent future
upheavals, Rosengren said.
Source: Reuters News, Kristina Cooke (01/08/09)
"The recent reductions in mortgage rates, in part due to monetary policy actions, have enabled more borrowers than would otherwise have done so to purchase or refinance homes," Rosengren said.
"Expansion of this effort and encouraging greater [Fannie Mae and Freddie Mac] participation, should encourage borrowers who have equity and reasonable credit scores to purchase or refinance homes," he added.
Once the market stabilizes, mortgage securitization should be restructured to prevent future
upheavals, Rosengren said.
Source: Reuters News, Kristina Cooke (01/08/09)
Sunday, January 11, 2009
Freddie Extends Foreclosure Moratorium
Freddie Mac is extending the suspension of foreclosure sales and evictions on occupied single family and two- to four-unit properties covered by mortgages it owns until Jan. 31.
The suspension doesn’t include vacant single-family properties.The extension will provide extra time to loan servicers to help troubled borrowers find alternatives to foreclosure.
It will also allow extra time to implement the Streamlined Modification Program, which went into effect on Dec. 15, 2008, and sets out to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.
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Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
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The suspension doesn’t include vacant single-family properties.The extension will provide extra time to loan servicers to help troubled borrowers find alternatives to foreclosure.
It will also allow extra time to implement the Streamlined Modification Program, which went into effect on Dec. 15, 2008, and sets out to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
or visit www.WilsonRealtors.Net
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Visit www.WilsonWorksForYou.com to see what we can do for you!
Mortgage Rates Continue Falling to Record Lows
For the fourth consecutive week, mortgage rates have fallen to all-time lows. The 30-year mortgage rates averaged 5.01 percent this week, which is a drop from last week's 5.1 percent. Last year at this time, rates averaged 5.87 percent.
"Interest rates for 30-year fixed-rate mortgages fell for the 10th week ... due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," says Freddie Mac Chief Economist Frank Nothaft.
Other rates also dropped for the week:
15-year fixed rates: dropped to 4.62 percent from 4.83 percent last week. Last year at this time 15-year mortgage rates averaged 5.43 percent.
5-year hybrid adjustable-rate mortgages averaged 5.49 percent, a drop from 5.57 percent last week.
The only slight increase in rates this week was in 1-year ARMs, which were 4.95 percent, up from 4.85 percent last week. Overall, 1-year ARMs were still down for the year from last year's 5.37 percent.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
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or visit www.WilsonRealtors.Net
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"Interest rates for 30-year fixed-rate mortgages fell for the 10th week ... due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," says Freddie Mac Chief Economist Frank Nothaft.
Other rates also dropped for the week:
15-year fixed rates: dropped to 4.62 percent from 4.83 percent last week. Last year at this time 15-year mortgage rates averaged 5.43 percent.
5-year hybrid adjustable-rate mortgages averaged 5.49 percent, a drop from 5.57 percent last week.
The only slight increase in rates this week was in 1-year ARMs, which were 4.95 percent, up from 4.85 percent last week. Overall, 1-year ARMs were still down for the year from last year's 5.37 percent.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
or visit www.WilsonRealtors.Net
Thinking about selling and not sure if the time is right?
Visit www.WilsonWorksForYou.com to see what we can do for you!
Sunday, January 4, 2009
Where Buyers are Picking Up Housing Bargains
Daily Real Estate News January 2, 2009
Smart investors in all parts of the country are picking up fabulous housing bargains.
Bill Leon, president of Florida’s Broward (County) Real Estate Investors Association, has been buying and selling investment property for years, but he thinks today’s deals are unprecedented. “People are afraid not to sell because they don’t know where the bottom of the market is,” he says.
David Dweck, a hard-money lender, believes the best buys are in what he calls “workforce housing,” aging bungalows on small lots. They are selling for as little as 10 cents on the dollar compared to what they were going for in 2006, he says, then fixed up and resold or rented quickly.
"People have been beaten down by fear, negativity, constant media bombardment," says Dweck. "There is a silver lining. The future looks bright.
"Sheresa Pompay, an associate with Hunt Real Estate ERA in Chandler, Ariz., says bad publicity is good for real estate investors. "I love the people who read about all the gloom and doom, because they stay on the sidelines and go, 'It hasn't hit bottom.' Whatever. By the time everyone jumps back in, we'll be out and doing something else."
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
or visit www.WilsonRealtors.net
Thinking about selling and not sure if the time is right?
Visit www.WilsonWorksForYou.com to see what we can do for you!
Smart investors in all parts of the country are picking up fabulous housing bargains.
Bill Leon, president of Florida’s Broward (County) Real Estate Investors Association, has been buying and selling investment property for years, but he thinks today’s deals are unprecedented. “People are afraid not to sell because they don’t know where the bottom of the market is,” he says.
David Dweck, a hard-money lender, believes the best buys are in what he calls “workforce housing,” aging bungalows on small lots. They are selling for as little as 10 cents on the dollar compared to what they were going for in 2006, he says, then fixed up and resold or rented quickly.
"People have been beaten down by fear, negativity, constant media bombardment," says Dweck. "There is a silver lining. The future looks bright.
"Sheresa Pompay, an associate with Hunt Real Estate ERA in Chandler, Ariz., says bad publicity is good for real estate investors. "I love the people who read about all the gloom and doom, because they stay on the sidelines and go, 'It hasn't hit bottom.' Whatever. By the time everyone jumps back in, we'll be out and doing something else."
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
or visit www.WilsonRealtors.net
Thinking about selling and not sure if the time is right?
Visit www.WilsonWorksForYou.com to see what we can do for you!
Friday, January 2, 2009
Media Advisory: Downpayment Clarification
Washington, December 31, 2008
There is some misinformation in the media lately about the required size of a down payment for a mortgage in today’s market, and the blog world is abuzz with misperceptions. Not all so-called experts are knowledgeable in this area, and some experts are being misunderstood.
The facts:
An individual may be required to put down 20 percent based on that person’s financial situation. But that is not an across-the-board requirement for all borrowers.
A borrower who puts down less than 20 percent is required to obtain mortgage insurance.
Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.
FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with family help) can become a homeowner.
PLEASE NOTE: FHA market share has grown roughly tenfold in the past year to an estimated 30 percent of new mortgage originations.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
or visit www.WilsonRealtors.net
There is some misinformation in the media lately about the required size of a down payment for a mortgage in today’s market, and the blog world is abuzz with misperceptions. Not all so-called experts are knowledgeable in this area, and some experts are being misunderstood.
The facts:
An individual may be required to put down 20 percent based on that person’s financial situation. But that is not an across-the-board requirement for all borrowers.
A borrower who puts down less than 20 percent is required to obtain mortgage insurance.
Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.
FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with family help) can become a homeowner.
PLEASE NOTE: FHA market share has grown roughly tenfold in the past year to an estimated 30 percent of new mortgage originations.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
or visit www.WilsonRealtors.net
Fed Action Creates Best Interest Rates in 50 Years
The National Association of Realtors® applauds the actions of the Federal Reserve Board in lowering interest rates for home buyers and homeowners who need to refinance. This will significantly impact housing sales, home valuations, and the nation’s overall economy.
The Federal Reserve is purchasing large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets.
“NAR has been aggressively calling for mortgage rate reductions, and the Fed’s action to slash interest rates, coupled with the actions by the Federal Housing Finance Agency and the Department of the Treasury, has driven down interest rates to make the dream of homeownership once again attainable for thousands of Americans,” said NAR President Charles McMillan.
Mortgage rates, which had averaged 6.3 percent in the third quarter, have recently fallen into the 4 percent range in some parts of the country. “That is the lowest rate in nearly 50 years and will bring buyers back to the market,” McMillan said. “We are pleased that the government heard our message and responded to our call for action.”
NAR has estimated that a one percentage point decrease in mortgage rates will increase home sales by more than 500,000 homes. “To boost the economy, it is critical to stem the rising tide of foreclosures and boost home buyer confidence in the housing market.” McMillan said. “Lower interest rates coupled with increased foreclosure mitigation are the key ingredients to stabilizing the housing market and preserving communities and homeownership.”
NAR continues to call on the federal government to maintain the higher loan limits passed in the economic stimulus bill earlier this year and to expand the $7,500 tax credit for first-time home buyers to all buyers and to eliminate the credit repayment requirement. “Together, all of these actions will stimulate and stabilize the housing market and begin an overall economic recovery,” McMillan said.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
The Federal Reserve is purchasing large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets.
“NAR has been aggressively calling for mortgage rate reductions, and the Fed’s action to slash interest rates, coupled with the actions by the Federal Housing Finance Agency and the Department of the Treasury, has driven down interest rates to make the dream of homeownership once again attainable for thousands of Americans,” said NAR President Charles McMillan.
Mortgage rates, which had averaged 6.3 percent in the third quarter, have recently fallen into the 4 percent range in some parts of the country. “That is the lowest rate in nearly 50 years and will bring buyers back to the market,” McMillan said. “We are pleased that the government heard our message and responded to our call for action.”
NAR has estimated that a one percentage point decrease in mortgage rates will increase home sales by more than 500,000 homes. “To boost the economy, it is critical to stem the rising tide of foreclosures and boost home buyer confidence in the housing market.” McMillan said. “Lower interest rates coupled with increased foreclosure mitigation are the key ingredients to stabilizing the housing market and preserving communities and homeownership.”
NAR continues to call on the federal government to maintain the higher loan limits passed in the economic stimulus bill earlier this year and to expand the $7,500 tax credit for first-time home buyers to all buyers and to eliminate the credit repayment requirement. “Together, all of these actions will stimulate and stabilize the housing market and begin an overall economic recovery,” McMillan said.
Free No-Obligation Consultations Available Anytime! Call, Text or E-mail us at:
Tony Wilson (317)354-7410 tonywilson@callcarpenter.com
Valerie Wilson (317)441-3921 vwilson@callcarpenter.com
Tax Credit for First-time Homebuyers Available!
A $7,500 tax credit is now available for any qualified purchase between April 8, 2008 and June 30, 2009, as part of the Housing and Economic Recovery Act of 2008. Visit www.WilsonRealtors.net for more information.
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