Real Estate News & Commentary from Rick Hemenway,
Mortgage Rates Drop This
Week
A
dip in the long-term mortgage rate this week offered home owners a
refinancing opportunity, according to Freddie Mac.
This
week's rates:
- Average interest on 30-year fixed loans fell to 5.16 percent from 5.25 percent last week.
- Interest on 15-year fixed loans also declined, slipping to 4.81 percent from 4.92 percent.
Stimulus Advances With Tax Credit Changes
The
$790 billion stimulus package hammered out by House and Senate conferees
late yesterday increases the home buyer tax credit to $8,000, from
$7,500, and drops the repayment feature for buyers who hold on to their
property for at least three
years.
The
NATIONAL ASSOCIATION OF REALTORS ® has sought removal of the repayment
requirement because it discourages buyers from taking advantage of the
tax credit. The three-year minimum holding period is a safeguard against
speculators' use of the credit.
The
legislation also extends the effective date of the credit to December 1
from June 30, and extends eligibility to borrowers who buy their home
with the help of state or local financial assistance that comes from the
proceeds of tax-exempt mortgage revenue bonds.
The
credit remains open only to first-time buyers (those who haven't owned
in at least three years) and some income eligibility restrictions apply,
but those are unchanged from the existing program.
Other provisions reportedly in the bill that could help housing markets
and communities include:
- FHA and conforming loan limits. Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the secretary of the U.S. Department of Housing and Urban Development.
- Foreclosure mitigation and neighborhood stabilization. Funding for states and localities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. Some news reports put the funding level at $2 billion.
- Rental assistance. Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.
- Transportation infrastructure. Up to $29 billion for highway construction projects, $8 billion for rail projects, and $5 billion to weatherize low-income homes.
- Rural housing development. Increased funding for the Rural Housing Service direct and guaranteed loan programs.
- Low-income housing grants. Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations
- Tax-exempt housing bonds. Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds
- Energy efficient housing. Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.
Source: NAR, AP,
Washington Post, New York Times, Bloomberg, and Wall Street Journal.
As always your referrals are appreciated and will be well taken care of!
Rick Hemenway. Realtor
Choice-Dantzler Properties, Inc
Cell 863-289-5657
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Real Estate News & Commentary from Rick Hemenway,
Mortgage
Rates Drop This Week
A dip in
the long-term mortgage rate this week offered home owners a refinancing
opportunity, according to Freddie Mac.
This week's rates:
- Average interest on 30-year fixed loans fell to 5.16 percent from 5.25 percent last week.
- Interest on 15-year fixed loans also declined, slipping to 4.81 percent from 4.92 percent.
Stimulus Advances With Tax
Credit Changes
The $790 billion stimulus package
hammered out by House and Senate conferees late yesterday increases the
home buyer tax credit to $8,000, from $7,500, and drops the repayment
feature for buyers who hold on to their property for at least three
years.
The NATIONAL ASSOCIATION OF REALTORS ® has sought removal of the
repayment requirement because it discourages buyers from taking
advantage of the tax credit. The three-year minimum holding period is a
safeguard against speculators' use of the credit.
The legislation also extends the effective date of the credit to
December 1 from June 30, and extends eligibility to borrowers who buy
their home with the help of state or local financial assistance that
comes from the proceeds of tax-exempt mortgage revenue bonds.
The credit remains open only to first-time buyers (those who haven't
owned in at least three years) and some income eligibility restrictions
apply, but those are unchanged from the existing program.
Other provisions reportedly in the bill that could help housing markets
and communities include:
- FHA and conforming loan limits. Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the secretary of the U.S. Department of Housing and Urban Development.
- Foreclosure mitigation and neighborhood stabilization. Funding for states and localities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. Some news reports put the funding level at $2 billion.
- Rental assistance. Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.
- Transportation infrastructure. Up to $29 billion for highway construction projects, $8 billion for rail projects, and $5 billion to weatherize low-income homes.
- Rural housing development. Increased funding for the Rural Housing Service direct and guaranteed loan programs.
- Low-income housing grants. Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations
- Tax-exempt housing bonds. Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds
- Energy efficient housing. Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.
Source: NAR, AP, Washington Post, New York Times, Bloomberg, and Wall
Street Journal.
As always your referrals are appreciated and will be well taken care of!
Rick Hemenway. Realtor
Choice-Dantzler Properties, Inc
Cell 863-289-5657
Real Estate News & Commentary from Rick Hemenway, February 9, 2009
Warren Buffett is known as the Oracle of Omaha, but Pimco's Bill Gross is known as the Sage of the Bond Market. His insight is typically accurate, and today he confirmed what many had been expecting: mortgage rates should be dropping to 4.5%. In an interview on CNBC, Gross noted: "I think at some point we're going to see a 4.5 percent mortgage rate and the 10-year Treasury rate capped at some level...when the Fed comes in to buy Treasuries that will be a big day."
And while we're talking about low mortgage rates, anyone reading this newsletter needs to let their voice be heard when it comes to the non-stimulus package. It was chalk full of ridiculous spending items such as $700+ million in school lunches and $21 million to re-sod the National Mall in Washington. The Senate package will likely shed many of those dumb concepts, but one concept needs to remain: the $15,000 home buyer tax credit. This significant provision, which was developed in the Senate version, expands the current $7,500 tax credit and no longer requires that it only be used by first time home buyers - and it doesn't have to be repaid to Uncle Sam (as is the current tax credit).
This, coupled with low interest rates, would be just the stimulus that the housing industry needs to overcome the fear the media has spread throughout the industry. This is as close to a bailout as Main Street is ever going to get...and it is our turn, isn't it?
The big, bold, and exciting news conference today announcing the latest bank rescue plan was...well, NOT. That's right. It got postponed. Treasury Secretary Timothy Giethner is now expected to unveil all the details this coming Tuesday at 11 AM, thereby allowing the focus to be on the US Senate as it puts the finishing touches on the economic stimulus package as it works its way through Congress. "We're focused on working with Congress to pass an economic recovery bill so we can create the jobs and make the investments necessary to get our economy moving again," said Isaac Baker, the Treasury Department spokesman.
Albert Einstein: "Never expect the people who caused a problem to solve it."
Einstein was truly a genius in more ways than one. Politicians and bankers are promising to "fix" the nation but we suspect most readers will be a bit savvier than to believe more empty promises and false starts. Instead, it is more important than ever to create your own economic stimulus plan by the strategic use of real estate. There are many great buys out there!! Give me a call and we can take a look around for some great investment opportunities!
As always your referrals are appreciated and will be well taken care of!
Rick Hemenway. Realtor
Choice-Dantzler Properties, Inc
Cell 863-289-5657