Mortgage applications to purchase homes increased 14.4 percent last week on an adjusted basis compared to the previous week, according to the Mortgage Bankers Association weekly survey.
The unadjusted Purchase Index increased 9.6 percent compared with the previous week and was down 7.4 percent compared to the same week a year ago.
On a seasonally adjusted basis, this is the highest Purchase Index recorded since the week ending May 7, 2010 in the middle of the tax-rebate push.
“The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation,” said Michael Fratantoni, the association’s vice president of research and economics.
“The level of purchase applications on a seasonally adjusted basis is now at its highest level since the expiration of the homebuyer tax credit,” Fratantoni concluded.
Interest rates were mixed, with 30-year fixed-rate mortgages rising to 4.50 percent from 4.46 percent and 15-year fixed-rate mortgages decreasing to 3.83 percent from 3.87 percent.
Source: Mortgage Bankers Association (11/24/2010)
Wednesday, November 24, 2010
7 Trends That Will Drive the Future of Housing
Hanley-Wood's ProSalesOnline.com identifies seven trends that the magazine’s editors believe will have the biggest impact on housing in 2011.
1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million "Echo Boomers" who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the "Sandwich Generation" – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.
1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million "Echo Boomers" who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the "Sandwich Generation" – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.
Today's Business and The Economy
Saw this quote and thought it was quite befitting...
Every morning in Africa, a Gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.
Every morning a Lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death.
It doesn't matter whether you are a Lion or a Gazelle... when the sun comes up, you'd better be running.
Every morning in Africa, a Gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.
Every morning a Lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death.
It doesn't matter whether you are a Lion or a Gazelle... when the sun comes up, you'd better be running.
Why Mortgage Lenders Want Tax Returns
Bankrate.com, By Marcie Geffner
September 27, 2010
Shopping for a home mortgage loan? Prepare to hand over real proof of your taxable income.
During the housing boom, lenders rarely required borrowers to provide copies of federal tax returns.
But today, lenders often ask borrowers to turn over entire tax returns, according to Brad Blackwell, national sales manager for Wells Fargo Home Mortgage.
Often people will think they can bring in the first two pages of the tax return, and what they need to bring is the full tax return and all schedules because a person's full income picture is contained in the entire set of documents, not just the first two pages," he says.
Borrowers generally also will be required to sign a Form 4506-T, which allows the lender to retrieve a tax transcript from the Internal Revenue Service.
Joe Metzler, a mortgage specialist at Mortgages Unlimited in St. Paul, Minn., says lenders use the 4506-T tax transcript to compare the borrower's W-2s to his or her reported income. If the numbers match, all is well. If not, the lender will dig deeper.
Why the sudden interest in borrowers' tax returns? The short answer is lenders are looking for income irregularities and evidence of loan fraud.
In most cases, "all aspects of the tax return (will be) examined to determine what the borrower's income is," Blackwell says.
That means the lender not only will look at reported income, but also at other items such as:
Unreimbursed employee business expenses. These so-called "2106 business expenses" typically are subtracted from income, according to Julie Miller, a sales manager at Prospect Mortgage in Irvine, Calif.
Examples include uniforms, union dues, mileage, expenses related to a cell phone used for business, marketing costs and training costs.
"If somebody makes $70,000 to $80,000 a year, but writes off $20,000 in business expenses, that is allowing them to reduce their taxable income, but we have to subtract that for qualifying purposes," she says.
Rental property income. This income must be documented and shown on the tax return, unless the property was purchased in the current calendar year. In that case, the rent must appear on consecutive monthly bank statements, Miller says.
"If you take in $1,000 a month in (rent), but you have $900 a month in expenses for owning the property, then you really only have $100 a month in positive rental income," she says. "And if you take in $1,000 a month, and you don't report that on your tax returns, you can't use that income at all."
Business losses. These include losses incurred by a spouse's business, according to Metzler.
For example, suppose one spouse earns $100,000 per year as an employee. The other spouse has a business that generated a $40,000 loss shown as a write-off on the couple's tax return. The lender will subtract $40,000 from $100,000 to yield a combined taxable income of $60,000. That might not be enough income to qualify for as large a loan as the borrower wanted.
Depreciation expenses. On the flip side, depreciation expense taken on a home office, business equipment or other asset could increase a borrower's loan-qualifying income, according to Blackwell.
"I want to stress 'may,'" Blackwell says. "An underwriter may be able to add that back."
Capital gains. These also may be counted as income -- or not.
"If the capital gain is a one-time event, we probably won't count it as income because the borrower can't show it to be sustainable," Blackwell says.
Too many tax deductions
Lenders' scrutiny of tax returns can present a big challenge for borrowers who are self-employed, according to Peter Ogilvie, president of First Residential Mortgage Corp. in Santa Cruz, Calif.
"Many self-employed borrowers -- real estate agents to shoe store owners -- are having a really difficult time getting loans because their accountants and bookkeepers are trained to minimize their income to save them on taxes," he says.
The solution isn't easy: Taxpayers need to "bite the bullet," to use Ogilvie's expression, and build up their taxable income for two years before they can qualify for a loan. Some may have to forgo deductions to which they believe they are entitled and pay more income tax so they can show more income on their tax return to qualify for a loan.
Borrowers who try to amend a prior year's tax return to show more income after the fact may be disappointed to learn this strategy won't work. Instead, an amended tax return can trigger a loan denial, according to Metzler.
"The very creative loan officer would say, 'Go back and amend your tax return to show some income, so you can qualify,'" he says. "So now there is a new rule that says you cannot qualify for a mortgage if your tax return has been amended."
September 27, 2010
Shopping for a home mortgage loan? Prepare to hand over real proof of your taxable income.
During the housing boom, lenders rarely required borrowers to provide copies of federal tax returns.
But today, lenders often ask borrowers to turn over entire tax returns, according to Brad Blackwell, national sales manager for Wells Fargo Home Mortgage.
Often people will think they can bring in the first two pages of the tax return, and what they need to bring is the full tax return and all schedules because a person's full income picture is contained in the entire set of documents, not just the first two pages," he says.
Borrowers generally also will be required to sign a Form 4506-T, which allows the lender to retrieve a tax transcript from the Internal Revenue Service.
Joe Metzler, a mortgage specialist at Mortgages Unlimited in St. Paul, Minn., says lenders use the 4506-T tax transcript to compare the borrower's W-2s to his or her reported income. If the numbers match, all is well. If not, the lender will dig deeper.
Why the sudden interest in borrowers' tax returns? The short answer is lenders are looking for income irregularities and evidence of loan fraud.
In most cases, "all aspects of the tax return (will be) examined to determine what the borrower's income is," Blackwell says.
That means the lender not only will look at reported income, but also at other items such as:
Unreimbursed employee business expenses. These so-called "2106 business expenses" typically are subtracted from income, according to Julie Miller, a sales manager at Prospect Mortgage in Irvine, Calif.
Examples include uniforms, union dues, mileage, expenses related to a cell phone used for business, marketing costs and training costs.
"If somebody makes $70,000 to $80,000 a year, but writes off $20,000 in business expenses, that is allowing them to reduce their taxable income, but we have to subtract that for qualifying purposes," she says.
Rental property income. This income must be documented and shown on the tax return, unless the property was purchased in the current calendar year. In that case, the rent must appear on consecutive monthly bank statements, Miller says.
"If you take in $1,000 a month in (rent), but you have $900 a month in expenses for owning the property, then you really only have $100 a month in positive rental income," she says. "And if you take in $1,000 a month, and you don't report that on your tax returns, you can't use that income at all."
Business losses. These include losses incurred by a spouse's business, according to Metzler.
For example, suppose one spouse earns $100,000 per year as an employee. The other spouse has a business that generated a $40,000 loss shown as a write-off on the couple's tax return. The lender will subtract $40,000 from $100,000 to yield a combined taxable income of $60,000. That might not be enough income to qualify for as large a loan as the borrower wanted.
Depreciation expenses. On the flip side, depreciation expense taken on a home office, business equipment or other asset could increase a borrower's loan-qualifying income, according to Blackwell.
"I want to stress 'may,'" Blackwell says. "An underwriter may be able to add that back."
Capital gains. These also may be counted as income -- or not.
"If the capital gain is a one-time event, we probably won't count it as income because the borrower can't show it to be sustainable," Blackwell says.
Too many tax deductions
Lenders' scrutiny of tax returns can present a big challenge for borrowers who are self-employed, according to Peter Ogilvie, president of First Residential Mortgage Corp. in Santa Cruz, Calif.
"Many self-employed borrowers -- real estate agents to shoe store owners -- are having a really difficult time getting loans because their accountants and bookkeepers are trained to minimize their income to save them on taxes," he says.
The solution isn't easy: Taxpayers need to "bite the bullet," to use Ogilvie's expression, and build up their taxable income for two years before they can qualify for a loan. Some may have to forgo deductions to which they believe they are entitled and pay more income tax so they can show more income on their tax return to qualify for a loan.
Borrowers who try to amend a prior year's tax return to show more income after the fact may be disappointed to learn this strategy won't work. Instead, an amended tax return can trigger a loan denial, according to Metzler.
"The very creative loan officer would say, 'Go back and amend your tax return to show some income, so you can qualify,'" he says. "So now there is a new rule that says you cannot qualify for a mortgage if your tax return has been amended."
Good USA Today Article, Stable Home Prices, Low Rates Could Gas Economy
USA Today, By Stephanie Armour
November 12, 2010
Mortgage rates are hitting another record low just as home prices are firming in more parts of the country, two trends that could help boost the economy.
Potential recovery fuel:
*Rates on 30-year fixed loans averaged 4.17%, down from 4.24% a week ago, Freddie Mac reported Thursday. They've been below 5% since early May.
*Median home prices in the third quarter were up from last year's third period in 77 of 155 metro areas, the National Association of Realtors reports. In 2009's third quarter, only 30 areas showed year- over-year growth.
The improvements in prices came despite a sharp drop-off in sales after the federal home buyers' tax credit expired in the spring.
Low mortgage rates, and at least flat home prices, could give more homeowners the confidence to refinance. If they spend some of what they save on their mortgages, that strengthens the economy.
"In most markets, the crash is over and stability is beginning," says Joel Naroff at Naroff Economic Advisors. "Realtors are saying it isn't great, but it's better than last year. If refinancings get going, that will help consumer confidence."
Prices are rising in areas where foreclosures have not hit very hard, Naroff says.
Still, the housing market is a long way from easy street. Median home prices fell in almost as many metro areas as they rose in NAR's survey. The national median, $177,900, was down 0.2% from 2009's third quarter.
Foreclosures and short sales -- where homes are sold for less than the mortgage balance -- were 34% of third-quarter sales, up from 30% a year ago.
Foreclosures tapered off last month as lenders announced temporary suspensions in the face of legal challenges. But they're likely to accelerate in the first quarter, says Rick Sharga of RealtyTrac.
Mortgage rates follow 10-year Treasury bond yields, and they've been falling since summer when the Federal Reserve began hinting it would buy long-term Treasury bonds to drive down long-term rates and stimulate the economy. The Fed said Nov. 3 it would buy $600 billion in Treasuries by June 30.
Mark Zandi, chief economist of Moody's Analytics, says lower mortgage rates should increase refinancings but won't forestall further price declines. Many homeowners still aren't benefiting from low rates, he says, because they have spotty credit or little equity in their homes.
"The housing market is still really fragile," Zandi says.
November 12, 2010
Mortgage rates are hitting another record low just as home prices are firming in more parts of the country, two trends that could help boost the economy.
Potential recovery fuel:
*Rates on 30-year fixed loans averaged 4.17%, down from 4.24% a week ago, Freddie Mac reported Thursday. They've been below 5% since early May.
*Median home prices in the third quarter were up from last year's third period in 77 of 155 metro areas, the National Association of Realtors reports. In 2009's third quarter, only 30 areas showed year- over-year growth.
The improvements in prices came despite a sharp drop-off in sales after the federal home buyers' tax credit expired in the spring.
Low mortgage rates, and at least flat home prices, could give more homeowners the confidence to refinance. If they spend some of what they save on their mortgages, that strengthens the economy.
"In most markets, the crash is over and stability is beginning," says Joel Naroff at Naroff Economic Advisors. "Realtors are saying it isn't great, but it's better than last year. If refinancings get going, that will help consumer confidence."
Prices are rising in areas where foreclosures have not hit very hard, Naroff says.
Still, the housing market is a long way from easy street. Median home prices fell in almost as many metro areas as they rose in NAR's survey. The national median, $177,900, was down 0.2% from 2009's third quarter.
Foreclosures and short sales -- where homes are sold for less than the mortgage balance -- were 34% of third-quarter sales, up from 30% a year ago.
Foreclosures tapered off last month as lenders announced temporary suspensions in the face of legal challenges. But they're likely to accelerate in the first quarter, says Rick Sharga of RealtyTrac.
Mortgage rates follow 10-year Treasury bond yields, and they've been falling since summer when the Federal Reserve began hinting it would buy long-term Treasury bonds to drive down long-term rates and stimulate the economy. The Fed said Nov. 3 it would buy $600 billion in Treasuries by June 30.
Mark Zandi, chief economist of Moody's Analytics, says lower mortgage rates should increase refinancings but won't forestall further price declines. Many homeowners still aren't benefiting from low rates, he says, because they have spotty credit or little equity in their homes.
"The housing market is still really fragile," Zandi says.
Sunday, November 14, 2010
Sun may set on child’s treehouse
Golden cites safety, illegal construction
By Electa Draper The Denver Post
GOLDEN» Monday is the showdown: A confrontation the creator of a one-of-a-kind treehouse is billing the “Battle of Luna’s Blue Moon Lagoon.”
“We’re going to get confrontational for art,” said Duncan Foss, a sculptor who considers the kids’ hangout he’s constructed for his daughter over a decade to be an art installation.
The city of Golden’s chief building official, Gerry George, begs to differ.
He considers the rambling series of bright blue decks and elevated boardwalks “illegal structures,” not “art.”
The planking wends down a short cliff behind the Foss backyard, past the deck with its fish-filled pond, and still lower to a “hammock hideout” hut nestled among slender trees at the edge of a field.
“She was in diapers when I started building this,” Foss said.
His daughter, Azulluna “Luna” Sincere, is now 11 and is also an artist — a painter.
Their backyard project began as a pirate ship and later evolved into the Tiki Village, which partially burned down in late December because of an exploding tiki torch.
The city first told him to take the whole thing down shortly after the fire, Foss said. He said he’s since removed 80 percent of it, and Luna is now down to one hut.
“We compromised,” Foss said.
The “Blue Lagoon” decks are still replete with painted sharks and starfish, carved seahorses, shells, pink flamingo, nets, lanterns, potted palms and many a nautical flourish.
Over this mutiny-inspiring bounty waves a flag inscribed, “Don’t tread on me.”
Foss said George recently told him that his removal efforts weren’t enough, and if the rest of it wasn’t all gone by 4 p.m. Monday, the city would take action to tear it down.
Foss said he isn’t tearing it down.
“It’s really disturbing to me that it would all be gone,” said Luna, clutching her ferret Carmel while Kelly the dog and “pond guardian” sat at her feet.
“It’s so beautiful,” Luna said. “People can hang out and have fun here — good, old fun outside.”
The city has cited concerns about safety and lack of permits. Golden spokeswoman Karlyn Tilley said Saturday that the structures don’t meet code or safety standards.
She said the city has explained to Foss how to meet code, but he hasn't done so.
Foss said he believes his neighbors will stand beside him Monday. Neighborhood children hang out here in droves — adults, too.
“The world has enough vidiots — kids who only play indoors with video games,” Foss said. “There’s still a few kids with Tom Sawyer and Huck Finn childhoods.”
By Electa Draper The Denver Post
GOLDEN» Monday is the showdown: A confrontation the creator of a one-of-a-kind treehouse is billing the “Battle of Luna’s Blue Moon Lagoon.”
“We’re going to get confrontational for art,” said Duncan Foss, a sculptor who considers the kids’ hangout he’s constructed for his daughter over a decade to be an art installation.
The city of Golden’s chief building official, Gerry George, begs to differ.
He considers the rambling series of bright blue decks and elevated boardwalks “illegal structures,” not “art.”
The planking wends down a short cliff behind the Foss backyard, past the deck with its fish-filled pond, and still lower to a “hammock hideout” hut nestled among slender trees at the edge of a field.
“She was in diapers when I started building this,” Foss said.
His daughter, Azulluna “Luna” Sincere, is now 11 and is also an artist — a painter.
Their backyard project began as a pirate ship and later evolved into the Tiki Village, which partially burned down in late December because of an exploding tiki torch.
The city first told him to take the whole thing down shortly after the fire, Foss said. He said he’s since removed 80 percent of it, and Luna is now down to one hut.
“We compromised,” Foss said.
The “Blue Lagoon” decks are still replete with painted sharks and starfish, carved seahorses, shells, pink flamingo, nets, lanterns, potted palms and many a nautical flourish.
Over this mutiny-inspiring bounty waves a flag inscribed, “Don’t tread on me.”
Foss said George recently told him that his removal efforts weren’t enough, and if the rest of it wasn’t all gone by 4 p.m. Monday, the city would take action to tear it down.
Foss said he isn’t tearing it down.
“It’s really disturbing to me that it would all be gone,” said Luna, clutching her ferret Carmel while Kelly the dog and “pond guardian” sat at her feet.
“It’s so beautiful,” Luna said. “People can hang out and have fun here — good, old fun outside.”
The city has cited concerns about safety and lack of permits. Golden spokeswoman Karlyn Tilley said Saturday that the structures don’t meet code or safety standards.
She said the city has explained to Foss how to meet code, but he hasn't done so.
Foss said he believes his neighbors will stand beside him Monday. Neighborhood children hang out here in droves — adults, too.
“The world has enough vidiots — kids who only play indoors with video games,” Foss said. “There’s still a few kids with Tom Sawyer and Huck Finn childhoods.”
Metro-area apartment-vacancy rates hit 3-year low
Apartment vacancies in metro Denver fell to a
three-year low of 5.3 percent during the third quarter,
according to a report released Wednesday.
The highest vacancy rates were in Arapahoe
County, where rates fell year-over-year from 8.5
percent to 6.7 percent. Rates were lowest in the
Boulder-Broomfield area, where they fell from
5.5 percent a year ago to 3.5 percent during the
third quarter.
Vacancy rates in other counties were Adams,
4.4 percent; Denver, 5.3 percent; Douglas, 4.4 percent;
and Jefferson, 3.9 percent.
Rents increased for the third consecutive quarter,
averaging $913. All counties in the metro
area reported year-over-year increases in average
rents.
Average rents for all counties were: Adams,
$915; Arapahoe, $882; Boulder-Broomfield, $993;
Denver, $905; Douglas, $1,113; and Jefferson, $864.
The Denver Post; Denver Post file photo
three-year low of 5.3 percent during the third quarter,
according to a report released Wednesday.
The highest vacancy rates were in Arapahoe
County, where rates fell year-over-year from 8.5
percent to 6.7 percent. Rates were lowest in the
Boulder-Broomfield area, where they fell from
5.5 percent a year ago to 3.5 percent during the
third quarter.
Vacancy rates in other counties were Adams,
4.4 percent; Denver, 5.3 percent; Douglas, 4.4 percent;
and Jefferson, 3.9 percent.
Rents increased for the third consecutive quarter,
averaging $913. All counties in the metro
area reported year-over-year increases in average
rents.
Average rents for all counties were: Adams,
$915; Arapahoe, $882; Boulder-Broomfield, $993;
Denver, $905; Douglas, $1,113; and Jefferson, $864.
The Denver Post; Denver Post file photo
Blueprint for National Budget Deficit Would Slay Sacred Cows
Under the $3.8 trillion plan,
the home-mortgage tax break
is one that would go.
the home-mortgage tax break
is one that would go.
“Sleeper” House is sold
At foreclosure auction, $1.5 million buys home featured in ’73 Allen film
The futuristic Genesee Mountain house made famous by Woody
Allen’s “Sleeper” movie sold at a foreclosure auction
Wednesday for $1.5 million— $1 more than the minimum bid
placed by the lender that foreclosed on the iconic home.
Denver investor John Dilday, a regular on the auction
circuit who is known by his cronies in the industry as
“the Godfather,” said he already has a number of people
interested in buying the house at 855 Visionary Trail.
Dilday typically buys homes to flip them to other investors.
“I usually don’t buy houses like this unless I have interest,”
Dilday said.
The futuristic Genesee Mountain house made famous by Woody
Allen’s “Sleeper” movie sold at a foreclosure auction
Wednesday for $1.5 million— $1 more than the minimum bid
placed by the lender that foreclosed on the iconic home.
Denver investor John Dilday, a regular on the auction
circuit who is known by his cronies in the industry as
“the Godfather,” said he already has a number of people
interested in buying the house at 855 Visionary Trail.
Dilday typically buys homes to flip them to other investors.
“I usually don’t buy houses like this unless I have interest,”
Dilday said.
Mortgage Rates Continue Record Slide
Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier, and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971.
The impact of the favorable borrowing costs is being muted somewhat, however, by a high rate of joblessness, foreclosures, and tight credit.
The impact of the favorable borrowing costs is being muted somewhat, however, by a high rate of joblessness, foreclosures, and tight credit.
Thursday, November 11, 2010
Mortgage rates fall to fresh lows this week
Posted: 11/11/2010 08:30:18 AM MSTUpdated: 11/11/2010 09:42:14 AM MST, Denver Post
NEW YORK — Rates on fixed mortgages dropped to their lowest levels in decades this week after the Federal Reserve unveiled a massive bond-buying program to help spur economic growth.
Mortgage buyer Freddie Mac said Tuesday the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That's the lowest on records dating back to 1971.
The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That's the lowest since the survey began in 1991.
The Fed detailed plans last week to buy $600 billion in Treasury bonds. On Wednesday, the central bank gave more details, saying it plans to purchase $105 billion in Treasurys over the next month. The extra demand means Treasurys will produce lower yields for investors. Mortgage rates tend to track those yields.
Mortgage rates have been at or near historic lows since April as investors, concerned about the health of the global economy, shift their money into Treasurys, pushing down rates on the bonds and consumer and business loans.
While more borrowers have refinanced their home loans, low rates have done little to boost the beleaguered housing market. Would-be buyers remain on the sidelines, too worried about their jobs or unable to qualify for a loan because of tighter credit standards. Others can't sell their own homes before buying another.
Home sales were the worst in decades this summer, and home prices fell in half of U.S. cities in the third quarter, the National Association of Realtors said Thursday.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
Rates on five-year adjustable-rate mortgages fell to their lowest level in at least five years. They averaged 3.25 percent, down from 3.39 percent a week earlier. It is the lowest rate on records dating back to January 2005.
Rates on one-year adjustable-rate home loans were unchanged at 3.26.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.
The average fee for 30-year and 15-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for 1-year and five-year mortgages.
Read more: Mortgage rates fall to fresh lows this week - The Denver Post http://www.denverpost.com/breakingnews/ci_16584270?source=rss#ixzz150mrSSzW
NEW YORK — Rates on fixed mortgages dropped to their lowest levels in decades this week after the Federal Reserve unveiled a massive bond-buying program to help spur economic growth.
Mortgage buyer Freddie Mac said Tuesday the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That's the lowest on records dating back to 1971.
The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That's the lowest since the survey began in 1991.
The Fed detailed plans last week to buy $600 billion in Treasury bonds. On Wednesday, the central bank gave more details, saying it plans to purchase $105 billion in Treasurys over the next month. The extra demand means Treasurys will produce lower yields for investors. Mortgage rates tend to track those yields.
Mortgage rates have been at or near historic lows since April as investors, concerned about the health of the global economy, shift their money into Treasurys, pushing down rates on the bonds and consumer and business loans.
While more borrowers have refinanced their home loans, low rates have done little to boost the beleaguered housing market. Would-be buyers remain on the sidelines, too worried about their jobs or unable to qualify for a loan because of tighter credit standards. Others can't sell their own homes before buying another.
Home sales were the worst in decades this summer, and home prices fell in half of U.S. cities in the third quarter, the National Association of Realtors said Thursday.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
Rates on five-year adjustable-rate mortgages fell to their lowest level in at least five years. They averaged 3.25 percent, down from 3.39 percent a week earlier. It is the lowest rate on records dating back to January 2005.
Rates on one-year adjustable-rate home loans were unchanged at 3.26.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.
The average fee for 30-year and 15-year fixed loans in Freddie Mac's survey was 0.8 point. It was 0.7 point for 1-year and five-year mortgages.
Read more: Mortgage rates fall to fresh lows this week - The Denver Post http://www.denverpost.com/breakingnews/ci_16584270?source=rss#ixzz150mrSSzW
Sunday, November 7, 2010
Leaks Can Dry Up Your Wallet
WSJ 11.7.10
By Amy Hoak
Left unchecked, water leaks can be a house’s worst enemy.
“Water is one of the most destructive things to a house,” says David Tamny, president of the American Society of Home Inspectors. “It can account for so many things going wrong in a structure.”
Water damage is the second most-common cause of damage in homes, following fires, says Scott Spencer, world-wide appraisal and loss-prevention manager for insurer Chubb Group.
Leaks that aren’t obvious often produce the biggest issues. “If your bathtub or shower is leaking, you’re going to recognize that quickly and take steps to fix it. The hidden problems, people don’t know to fix,” Mr. Tamny says. As a result, they tend to worsen over time.
Still, if you know what to look for, it’s not difficult to identify water leaks before they flood into bigger—and more expensive—headaches. In addition to watching for spikes in your water bill, which could indicate leaky fixtures, look out for the problems in the following places.
1 The Roof
Your roof can last many years, but it’s important to regularly check on its condition, says Mr. Spencer, “especially after a traumatic event like a hailstorm or a windstorm.” Identifying a roof leak quickly can limit the amount of repair work needed and limit the spread of mold.
Also, you should make a visit to the attic at least once a year, says David Lupberger, home-improvement expert for Service- Magic.com , which connects consumers with home-improvement specialists. “Make sure that it doesn’t smell musty or moldy,” he says.
Most roofing contractors will offer free roof inspections, but remember, their objective is to find something wrong so they can fix it, Mr. Spencer says.
Another option is to hire a home inspector, Mr. Tamny says. The cost of home-inspection services vary, but if you just want the roof looked at, ask for a partial inspection, which will help keep the expense down.
Skylights also can be vulnerable to leaks because of their location and the challenges they present in installation, according to Chubb. Inside the house, check for any staining in the skylight area, which could be caused by a build-up of condensation.
2 The Basement
The best way to prevent problems in the basement starts outside, Mr. Lupberger says.
“Every spring and fall you should be cleaning your gutters and downspouts, and you want to make sure that water is not puddling next to your foundation,” he says. “Then, walk around the house and make sure there aren’t low points next to the foundation. Ninety percent of water in the basement is due to improper drainage.”
Crawlspaces also should be checked on occasion for signs of mold. “Liquid water is only one part of the equation,” Mr. Tamny says. Humidity can also be destructive, and lead to mold. For that reason, be mindful when setting a humidifier. “Humidity in the house should never be above 50%. The colder it gets, the lower the humidity should be,” he says.
3 Bathroom and Kitchen
Because of the frequency with which people use their bathrooms, it’s likely that problems will be spotted early. Still, there are preventive steps that can be taken so problems don’t have a chance to develop.
The shower and bath area is a vulnerable place for water leaks, making it important to proactively replace the caulk around fixtures every couple of years, Mr. Spencer says.
Also, replace broken toilet flappers, the rubber part in the tank that seals the drain, and address leaky fixtures, says Jimmy Carter, senior director of corporate field services for American Leak Detection. If you hear water running when the bathroom isn’t being used, you could have a problem.
In the bathroom and the kitchen, regularly feel the pipes under sinks to make sure there aren’t any leaks, Mr. Spencer says.
As the weather turns cooler, one of the “fast and furious” water leaks that homeowners encounter occurs when a pipe freezes and bursts, he says. To prevent that, never turn the heat below 55 degrees, he says. On particularly cold days, leave the bottom vanity open so there are no extremely cold temperatures near the pipes.
“Be particularly aware of those water fixtures on exterior walls of the home,” Mr. Spencer says, since those walls will be colder.
4 Appliances
Check washing-machine hoses to make sure they’re not loose fitting or aged. You may see a bulge in the washer’s rubber hose when it’s starting to wear, says Mr. Carter. Hoses become brittle and often require replacing every five to seven years, according to Chubb.
Also keep an eye on your water heater, which Mr. Spencer says is a “classic source of damage from water loss.” Age matters; water heaters typically have a lifespan of 10 to 12 years, he says.
Check the silver plate mounted on the water heater, which includes manufacturer information, Mr. Spencer adds. Look for evidence of leaks around the pipes and at the base of the water heater, as well as rust on any of the parts, according to Chubb.
By Amy Hoak
Left unchecked, water leaks can be a house’s worst enemy.
“Water is one of the most destructive things to a house,” says David Tamny, president of the American Society of Home Inspectors. “It can account for so many things going wrong in a structure.”
Water damage is the second most-common cause of damage in homes, following fires, says Scott Spencer, world-wide appraisal and loss-prevention manager for insurer Chubb Group.
Leaks that aren’t obvious often produce the biggest issues. “If your bathtub or shower is leaking, you’re going to recognize that quickly and take steps to fix it. The hidden problems, people don’t know to fix,” Mr. Tamny says. As a result, they tend to worsen over time.
Still, if you know what to look for, it’s not difficult to identify water leaks before they flood into bigger—and more expensive—headaches. In addition to watching for spikes in your water bill, which could indicate leaky fixtures, look out for the problems in the following places.
1 The Roof
Your roof can last many years, but it’s important to regularly check on its condition, says Mr. Spencer, “especially after a traumatic event like a hailstorm or a windstorm.” Identifying a roof leak quickly can limit the amount of repair work needed and limit the spread of mold.
Also, you should make a visit to the attic at least once a year, says David Lupberger, home-improvement expert for Service- Magic.com , which connects consumers with home-improvement specialists. “Make sure that it doesn’t smell musty or moldy,” he says.
Most roofing contractors will offer free roof inspections, but remember, their objective is to find something wrong so they can fix it, Mr. Spencer says.
Another option is to hire a home inspector, Mr. Tamny says. The cost of home-inspection services vary, but if you just want the roof looked at, ask for a partial inspection, which will help keep the expense down.
Skylights also can be vulnerable to leaks because of their location and the challenges they present in installation, according to Chubb. Inside the house, check for any staining in the skylight area, which could be caused by a build-up of condensation.
2 The Basement
The best way to prevent problems in the basement starts outside, Mr. Lupberger says.
“Every spring and fall you should be cleaning your gutters and downspouts, and you want to make sure that water is not puddling next to your foundation,” he says. “Then, walk around the house and make sure there aren’t low points next to the foundation. Ninety percent of water in the basement is due to improper drainage.”
Crawlspaces also should be checked on occasion for signs of mold. “Liquid water is only one part of the equation,” Mr. Tamny says. Humidity can also be destructive, and lead to mold. For that reason, be mindful when setting a humidifier. “Humidity in the house should never be above 50%. The colder it gets, the lower the humidity should be,” he says.
3 Bathroom and Kitchen
Because of the frequency with which people use their bathrooms, it’s likely that problems will be spotted early. Still, there are preventive steps that can be taken so problems don’t have a chance to develop.
The shower and bath area is a vulnerable place for water leaks, making it important to proactively replace the caulk around fixtures every couple of years, Mr. Spencer says.
Also, replace broken toilet flappers, the rubber part in the tank that seals the drain, and address leaky fixtures, says Jimmy Carter, senior director of corporate field services for American Leak Detection. If you hear water running when the bathroom isn’t being used, you could have a problem.
In the bathroom and the kitchen, regularly feel the pipes under sinks to make sure there aren’t any leaks, Mr. Spencer says.
As the weather turns cooler, one of the “fast and furious” water leaks that homeowners encounter occurs when a pipe freezes and bursts, he says. To prevent that, never turn the heat below 55 degrees, he says. On particularly cold days, leave the bottom vanity open so there are no extremely cold temperatures near the pipes.
“Be particularly aware of those water fixtures on exterior walls of the home,” Mr. Spencer says, since those walls will be colder.
4 Appliances
Check washing-machine hoses to make sure they’re not loose fitting or aged. You may see a bulge in the washer’s rubber hose when it’s starting to wear, says Mr. Carter. Hoses become brittle and often require replacing every five to seven years, according to Chubb.
Also keep an eye on your water heater, which Mr. Spencer says is a “classic source of damage from water loss.” Age matters; water heaters typically have a lifespan of 10 to 12 years, he says.
Check the silver plate mounted on the water heater, which includes manufacturer information, Mr. Spencer adds. Look for evidence of leaks around the pipes and at the base of the water heater, as well as rust on any of the parts, according to Chubb.
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