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:: Interest Rate Update November 14, 2009

CONVENTIONAL
30 Yr 4.625%
15 Yr 4.25

ARM
3 Yr 3.5%
5 Yr 3.5
7 Yr 3.5

FHA/VA
30 Yr 4.75%
15 Yr 4.375
3 Yr ARM 4.125
5 Yr ARM 4.0

MARKET COMMENTS
In economic report news this morning, Consumer Sentiment came in lower than expected – estimates were for 71, and the number came in at 66 – but this doesn’t strike us as much of a surprise. The media has been beating the drum in seeming attempts to rouse some euphoria…and while Wall Street might be buying it temporarily, Main Street isn’t.

The Fed stepped in with more buying of Mortgage Backed Securities yesterday, helping Bond prices recover from news of a weak Treasury Auction. Overall, Fed purchases have averaged about $14B per week so far in November. Looking back, October averaged $17B per week, down from May’s peak of $25B per week…and the weekly purchases will continue to decline as the program winds up. The total Fed purchases made since their buying program started is just over $1 Trillion, leaving $244B left to purchase until the program wraps up at the end of March 2010. This would leave on average, about $12.8B to be purchased each week – a bit less than current levels.

Remember, as the Fed winds down their buying support, this will be a contributing factor in Bond prices moving lower and home loan rates rising over the coming months.

Next week will be loaded up with high impact economic reports, including Retail Sales numbers and a look at inflation with the Producer Price Index and Consumer Price Index.

Have a great weekend and feel free to call with any questions!

SOURCE:

Michael Delzer
First Class Financial Services
(720) 904-9048,
www.fcfsdenver.com
Home Mortgages with Honesty, Integrity, Service & Trust

 

:: Homebuyer Tax Credit Changes November 5, 2009

For a side by side comparison of the previous Homebuyer Tax Credit and the new version visit:

Homebuyer Tax Credit Changes

 

:: Are Mortgage Rates Rising? October 29, 2009

What are the signs that mortgage rates, now at historic lows, are about to go up?

One way to catch a clue is to read the minutes of the Federal Reserve. For instance, the Federal Open Market Committee said in its September minutes that when it came to interest rates, there is “no policy change.” And the minutes said that while the Fed believes “an economic recovery is underway,” it regards a weak economy as a greater risk than inflation. Upcoming meeting minutes are likely to be just as forthcoming if an uptick is in the cards.

Other signs include:

  • Declining unemployment: The unemployment rate is sitting at 9.7 percent. If lots of Americans go back to work, an increase in interest rates is likely.
  • Rising discount rate: The rate the Fed charges banks that borrow from it directly stands at 0.5 percent. If it rises or the spread between it and the Federal Funds rate widens, then mortgage rate increases won’t be far behind.

Source: BusinesWeek.com, Marc Roth (10/28/2009)

 

:: Homebuyer Tax Credit Extension Update October 29, 2009

Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.

Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.

Source: Wall Street Journal, Corey Boles and John D. McKinnon (10/29/09)

 

:: SALE on Home Energy Audits! October 13, 2009

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Xcel is offering a reduced price on Home Energy Audits for Colorado Xcel customers! I just signed up!
Call 1-800-895-4999*

Visit Xcel for more info:
http://www.xcelenergy.com/Residential/Programs_Resources/Pages/Home_Energy_Audits.aspx

For other Xcel energy tips, rebates, and programs visit:
http://www.xcelenergy.com/Company/Pages/Home.aspx
http://www.responsiblebynature.com/change/#/landing

Home Energy Audit Program features

For $90* you will receive our Blower Door Audit, which includes:

  • A comprehensive home audit
  • A blower door test, which helps us determine where air is entering your home
  • A customized energy bill analysis to help you understand how much energy your home uses
  • A comprehensive audit report including a list of recommendations showing where you can save the most energy and money
  • A comparison of costs and savings for any suggested improvements
  • Answers to your specific questions

Additional Audit options include:

For $60* you will receive our Standard Audit, which includes:

  • A comprehensive home audit
  • A customized energy bill analysis to help you understand how much energy your home uses
  • A comprehensive audit report including a list of recommendations showing where you can save the most energy and money
  • A comparison of costs and savings for any suggested improvements
  • Answers to your specific questions

For $120* you will receive our Infrared Audit, which includes:

  • A comprehensive home audit
  • A blower door test, which helps us determine where air is entering your home
  • An infrared scan of your home to help pinpoint the problem areas, particularly areas not visible to the eye
  • A customized energy bill analysis to help you understand how much energy your home uses
  • A comprehensive audit report including a list of recommendations showing where you can save the most energy and money
  • A comparison of costs and savings for any suggested improvements
  • Answers to your specific questions
 

:: Interest Rate Update, 9-25-09 September 25, 2009

Filed under: real estate - interest rates — Jennifer @ 5:18 pm
Tags: , ,

Here are the rates going into the weekend along with some important comments!  Although this is a little longer than usual, I highly recommend you take the time to read the information. It explains what Mike Delzer thinks is going to be happening to interest rates over the next 6 months.

CONVENTIONAL
30 Yr   4.75%
15 Yr   4.25

ARMS
3 Yr   3.70%
5 Yr   3.875
7 Yr   4.0

FHA/VA
30 Yr   4.75%
15 Yr   4.375

JUMBO
30 Yr   6.20%
15 Yr   5.85
5 Yr ARM  4.75%
7 Yr ARM  5.40

Market Comments -
As expected, the Fed did not touch interest rates, but the statement was a market mover.  The Fed said they are going to draw out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010.  There will be no additional buying, but instead, a longer weaning off of the program.  This tells us a few things – there was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and the statement is a nice way of the Fed saying “no.”  They will not be buying more, but what they will do is attempt to provide a smoother transition to normal market conditions.  It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher…most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise.

So what does this mean for rates in the short term, and why did the Bond market rally on this news?  The rally was more than likely due to the headlines from the media which said that the program was “extended”.  The markets reacted positively by thinking that the program would stay in place as is for three more months, which would have included more Fed buying.  But the gradual reduction in purchases has to bring us to higher rates.  The Fed has been buying about $25B per week, but the new plan to drag out these purchases over a longer period of time, means that they will be reducing both the frequency and amounts of their purchases.  This will cause higher levels of volatility, as the Fed will be purchasing less often and less consistently.  So we will see a gradual rise in rates over time…and we must be sure that this message gets out to our clients.  While we won’t be seeing a sudden jerk higher in rates when the Fed buying program comes to an end, it is clear that rates are now going to be on a gradual rise…and waiting to purchase or refinance will mean a higher interest rate.

In this morning’s economic news, Initial Jobless Claims fell by 21,000 in the latest week to 530,000, which was below expectations of 550,000.  While this was a better than expected read, it’s still not exactly good news regarding the overall employment situation.  Think about it…530,000 more people applying for unemployment benefits for the very first time really isn’t something to get too excited about.

Existing Home Sales were reported at 5.10 million, less than expectations of 5.35 million and the first decline in five months.  However, there was some good news in the report, as inventories of unsold homes fell to an 8.5 month level…the lowest inventory level seen since April 2007.  Not a bad talking point to mention to clients, as you also share with them the impact of the Fed’s comments.

New Home Sales were reported at 429,000, slightly lower than expectations of 441,000.  The inventory of unsold homes dropped to a 7.3 month supply, down from last month’s 7.5% and the lowest since January 2007.  The lower inventory level show signs of improved market conditions, but how much of the improvement is from activity vs. less construction from builders?  There is probably some of both.

SOURCE:

Michael Delzer
First Class Financial Services
(720) 904-9048, www.fcfsdenver.com
Home Mortgages with Honesty, Integrity, Service & Trust

 

:: Interest Rate Update September 11, 2009

Here are the interest rates going into the weekend along with some quick comments!

CONVENTIONAL
30 Yr   4.75%
15 Yr   4.25

ARMS
3 Yr   3.70%
5 Yr   3.875
7 Yr   4.0

FHA/VA
30 Yr   4.75%
15 Yr   4.375
3 Yr ARM   4.0%
5 Yr ARM   4.0

JUMBO
30 Yr   6.20%
15 Yr   5.55
5 Yr ARM  4.75
7 Yr ARM  5.40

Market Comments -
The last economic report for the week was today’s Consumer Sentiment, released at 10:00am ET…it came in at 70.2, stronger than expectations of 67.5.  Typically, Mortgage Bonds might have slipped a little lower on better than expected news, but prices were able to shrug off this release and actually move a bit higher as Bonds bask in the glow of the positive auction results of the past three days.

In Fed MBS buying action, the New York Fed purchased $32.4B in Mortgage Backed Securities last week, bringing the yearly total to $849B out of the $1.25T they committed to.  The Fed purchases have helped home loan rates to stay near present low levels – but remember that their buying program is set to be over near the end of the year.  There is talk that the program will be extended, however that is not a guarantee and should the program expire without further Fed buying, home loan rates will assuredly rise.  Combined with the current expiration date of November 30th for the $8000 First Time Homebuyer credit – this data presents a great talking point on getting those prospects off the fence and into application.

Today is the eighth anniversary of 9/11 – take a moment to remember those souls who perished on that terrible day.

Source:

Michael Delzer
First Class Financial Services
(720) 904-9048, www.fcfsdenver.com
Home Mortgages with Honesty, Integrity, Service & Trust

 

:: Solar Energy is Becoming More Affordable September 9, 2009

Filed under: eco products — Jennifer @ 12:11 pm
Tags: , , ,

solar_modules_on_roofSolar Panel Prices Drop Dramatically

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Prices for solar panels are falling fast. Compared to a year ago, prices for panels and installed systems are about 25 percent less, retailers and installers say.

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Combined with a 30 percent rebate offered by the U.S. government, plus rebates offered by many states, some buyers are paying a little less than $16,000 for systems that would have cost twice that a year ago.

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“Solar is now affordable for people for whom it wasn’t before,” says Jeff Wolfe, CEO of groSolar, a Vermont solar-panel system installer and distributor.

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California entrepreneurs, who call themselves One Block Off the Grid, are getting even better prices by organizing home owners into buying groups.

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Source: The Wall Street Journal, Cassandra Sweet (09/08/2009)

 

:: More Sellers are Becoming Landlords September 4, 2009

To sell or to rent?

To sell or to rent?

 

More people are becoming landlords in an economy where selling a home can be challenging.

The nation’s second-largest home insurer, Allstate Corp., says the number of homeowners converting their homeowners insurance to landlord policies rose 27 percent in the first quarter of 2009.

Jim Bass of Jim Bass Real Estate Group in Frederick, Md., says he has begun offering property-management services for absent owners, many of whom are convinced it will be easier to sell in a couple of years.

Holding on probably isn’t the best answer, says economist Edward Leamer, director of the UCLA Anderson Forecast. Leamer suggests negotiating a short sale instead. “Better to take your losses and move on.”

Another factor to consider is whether renting will reduce or eliminate the value of the capital-gains tax exclusion. Federal tax law requires living in the home at least two of the previous five years to qualify for the full capital-gains tax exclusion when the house is sold. Of course, if there is no profit to be had, then this isn’t a problem.

Source: The Wall Street Journal, M.P. McQueen (09/02/2009)


Strapped Home Owners Turn to Renting

Rentals are rising in Greenwich, Conn., a town synonymous with luxury housing.

The housing market in this pricey community is in trouble. Single-family sales in Greenwich declined 48 percent to 167 this year through July, according to Shore & Country, based in Greenwich.

As a result of this downturn, the number of single-family properties for sale in Greenwich rose 600 percent this year. More than 525 homes were rented or listed for rent through August, according to Eric Biork, sales director for Prudential Connecticut Realty.

Mark Hanson, president of M. Hanson Advisors, a housing and mortgage research company in Menlo Park, Calif., was critical of sellers who chose to rent instead of dropping the prices.

“It’s really doing nothing but delaying the inevitable,” Hanson said. “These houses are not going to double in price.”

Source: Bloomberg, Oshrat Carmiel (09/03/2009)

 

:: New Zoning Code for Denver August 25, 2009

Northwest Denver zoning is being revised again!

After lots of input from citizens the New Code Draft #2 is now available.

To see how the zone might affect your property and the property around you, visit:

THE NEW ZONING CODE
Putting Blueprint Denver To Work
http://www.newcodedenver.org/

ZONING MAP
Click here

New_Zone_Code_Denver_Draft_2