News for Prescott AZ - AmericanTowns.com

Friday, January 30, 2009

How Low Will Rates Go? Maybe Not as Low as People Expect

I'm hearing many borrowers argue against buying a home or locking a
refinance by saying "I am waiting and holding for 4.5%"...but here's one
reason we may not get there.  Yes, the Fed has been buying Mortgage Bonds,
but if you look at what they are purchasing, they are buying a lot of FNMA
30-yr 5.5% and 5.0% Bonds, which won't have much of a positive effect on
present rates. 

Why is the Fed buying these Bonds?  Well if you think about it, it's very
smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds
actually represent outstanding mortgages with rates of 6 - 6.50%, which are
precisely the loans being refinanced today.  

So many of the mortgages in the FNMA 5.5% pools will be refinanced and paid,
thus giving the Fed a quick recoup on some of their investment.  And this is
likely a big reason why the Fed said yesterday they could continue this
purchasing program beyond June, if necessary.  So the Fed buying higher rate
coupons will not necessarily get rates to 4.5%, but it should put a ceiling
on how high rates can go during the near term. 

The bottom line is the rate range we are in today is the lowest in 50 years.
Rates won't stay here forever and many experts expect them to rise as we
move into summer. Every 1% increase in rate will cost a buyer as much as a
10% increase in the purchase price. For anyone thinking about buying or
refinancing a home, now is the time to get serious. Waiting for that 4.5%
or 4% rate could cost a bundle.

If you have any questions about this confusing market please feel free to
contact me. I'm happy to help.

Theron Wall, Sr. Mortgage Consultant
Certified Mortgage Planning Specialist

Wallick & Volk Mortgage Lending
3615 Crossings Dr, Ste A
Prescott, AZ 86305
Cell (928) 533-7473
Office (928) 778-7167
Fax (928) 445-5308
www.theronwall.com

Friday, January 23, 2009

Kingswood Home

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1765 Twin Pines


Kingswood Estates
Beautifully designed modern home with upgrades throughout: gourmet kitchen with granite countertops; stone fireplace in living room; formal dining; master suite with fireplace, snail shower and jetted tub; and travertine & hardwood floors. Enjoy unending views from every room or step outside to a large Trex deck. Truly a high-end custom home.
Listed for $728,000




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Monday, January 19, 2009

HOUSING AND ECONOMIC RECOVERY ACT OF 2008

 

First‐time Homebuyer Tax Credit – Although not as great as it was advertized still might be a tool buyers need to look into.

 

FEATURE

H.R. 3221

Housing and Economic Recovery Act of 2008

Amount of Credit

Ten percent of cost of home, not to exceed

$7500

Eligible Property

Any single‐family residence (including condos, co‐ops) that will be used as a principal residence.

Refundable

Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.

Income Limit

Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively).

First‐time Homebuyer Only

Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase.

Recapture

Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale.

Impact on District of Columbia Homebuyer Credit

DC credit not available if purchaser uses this credit.

Effective Date

Purchases on or after April 9, 2008

Termination

July 1, 2009

 

Interaction with Alternative Minimum Tax

Can be used against AMT, so credit will not throw individual into AMT

 

Let me know how I can help. www.bradbergamini.com

 

Friday, January 16, 2009

Bonds Boldly Go Where They Haven't Gone Before

 

"HAVE THE NERVE TO GO INTO UNEXPLORED TERRITORY." Alan Alda. Taking those words to heart, Bonds and home loan rates did exactly that last week, reaching historic levels.

A few important news items from last week... First, the results are in on the Fed's first run at purchasing Mortgage Backed Securities under their new $500 Billion buying program. Over the last week, the Fed bought $10.2 Billion of Mortgage Backed Securities. Any time there is increased buying demand - for anything - prices will move higher. When Bond prices move higher, home loan rates improve.

Next, Stocks faced selling pressure last week due to a rash of earnings warnings from the nation's retailers, including Macy's, who announced they are closing eleven stores. Because money coming out of Stocks is often parked over into the Bond market, Bonds and home loan rates responded by reaching never-before-seen levels.

Finally, the job market reached a level not seen since 1945. The Labor Department reported on Friday that there were 524,000 jobs lost during the month of December, which you can see in the Jobs Report chart below. Why does the chart look unusual? Because it's measuring a negative number, for something that is normally reported as a positive, as in number of jobs created.

Jobs Report

All told, there were 2,600,000 jobs lost in 2008, which represents the biggest job loss in any calendar year since 1945, when 2,750,000 jobs were lost as the wartime economy was demobilized. But we must consider that there are a lot more people in the US today. Adding further sting to the report was the Unemployment Rate, which shot up higher than expectations to 7.2%, the highest reading in 16 years.

As we know...Bonds and home loan rates typically improve on negative economic news, since money will flow out of Stocks and into Bonds when bad news hits the wires. But keep in mind, these are volatile times - and it's hard to know how long the good times will last for home loan rates. Regardless of if you see a move or a refinance in your future, let's review your situation to determine if any decisions need to be made at this time.

2009 IS LARGELY UNEXPLORED TERRITORY AT THIS POINT...ARE YOU READY? SEE THIS WEEK'S MORTGAGE MARKET VIEW FOR FIVE QUICK TIPS YOU CAN ACT ON RIGHT NOW, TO GET ORGANIZED AND SAVE SOME MONEY TOO!

 

Forecast for the Week

 

 

The Fed's purchasing program will continue to be something to watch in the weeks and months ahead, and there are also several reports that may impact whether Bonds and rates continue to explore new territory during this coming week.

On Wednesday, we will see the Retail Sales Report for December, and since many retailers have already said this holiday season was the worst in a long time, it wouldn't be a surprise if this is a horrible report...which could be friendly for Bonds and home loan rates.

This week also brings news on the inflation (or deflation) front, with Thursday's wholesale measuring Producer Price Index (PPI) Report and Friday's Consumer Price Index (CPI) Report. With the recent concerns on deflation, it will be important to see which way these reports have moved, and what the impact may be on home loan rates.

 

The Mortgage Market View...

 

 

How Ready Are You for 2009?

Now that the holidays are over and a new year has begun, now is the perfect time to make sure you are ready for 2009. Here are five things you should do this month that will make your life easier in the months ahead:

  1. Clean Out the Clutter: You keep saying you'll do it...go ahead and do it. Spend an hour going through your old files, and shred those receipts, bills, and statements you no longer need, like old ATM receipts and utility bills, paystubs more than a year old, and receipts for things that are not deductible.
  2. Get Organized: While you're at it, create new files for your 2009 tax-related papers and receipts. Examples of categories include medical expenses, gift and charitable donations, and home improvements.
  3. Check the Gift Card Fine Print: If you received gift cards as a present over the holidays, use them soon. Some have expiration dates, or the amount on the card may get reduced over time. In addition, in the current economy, retailers that go out of business may not honor gift cards.
  4. Do Some Review: Review your various insurance policies - life, home, auto, etc - to make sure the coverage you have is still the best fit for your needs and situation. To save on cash out of pocket, you might even consider raising your deductible to get a lower premium.
  5. Do Some Reflection: Take an honest look at your schedule and responsibilities and make sure you are taking the time you need to stay healthy and feel good. Don't feel bad about actually scheduling specific blocks of time to exercise or spend special time with family and friends, to ensure it actually happens. This will make everything else you have to do this year easier...and more enjoyable, too!

 

The Week's Economic Indicator Calendar

 

 

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of January 12 – January 16

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Wed. January 14

08:30

Retail Sales

Dec

-1.1%

 

-1.8%

Moderate

Wed. January 14

08:30

Retail Sales ex-auto

Dec

-1.2%

 

-1.6%

HIGH

Wed. January 14

10:30

Crude Inventories

1/09

NA

 

6682K

Moderate

Thu. January 15

10:00

Philadelphia Fed Index

Jan

-35.0

 

-32.9

HIGH

Thu. January 15

08:30

Jobless Claims (Initial)

1/10

NA

 

467K

Moderate

Thu. January 15

08:30

Core Producer Price Index (PPI)

Dec

0.1%

 

0.0%

Moderate

Thu. January 15

08:30

Producer Price Index (PPI)

Dec

-1.9%

 

-2.2%

Moderate

Fri. January 16

08:30

Consumer Price Index (CPI)

Dec

-1.0%

 

-1.7%

HIGH

Fri. January 16

08:30

Core Consumer Price Index (CPI)

Dec

0.1%

 

0.0%

HIGH

Fri. January 16

09:15

Capacity Utilization

Dec

74.7%

 

75.4%

Moderate

Fri. January 16

09:15

Industrial Production

Dec

-0.8%

 

-0.6%

Moderate

Fri. January 16

10:00

Consumer Sentiment Index (UoM)

Jan

60.0

 

60.1

Moderate

 

Wednesday, January 14, 2009

Will Housing Markets Will Roar Back in 2009

This is kind of long but extremely informative & positive!

Report: Housing Markets Will Roar Back in 2009 Tuesday, January 06, 2009 - Report from: www.nationalrealtynews.com Provided by: Betty Winn, Chicago Title

FAIR OAKS, CA - The nations foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery, according to the 2009 Outlook from Foreclosures.com.

"Recovery is underway. Affordable is back in the housing market," says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com. "In 2009, housing will not only recover, but we'll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market."

"With 4.5% fixed mortgage rates, housing prices lower than they were 'pre-housing bubble', commodity prices lower, tax credits available for homebuyers, and the government eager to stimulate our economy, for the first time in years I can see prices rising again in 2009" adds McGee. "This is a great time to buy properties for investors -- to buy properties at wholesale prices below today's already low prices -- rent them out for positive cash flow and then sell them for big profits in late 2009 once price appreciation kicks in."

The latest U.S. Foreclosure Index by Foreclosures.com shows a slight drop from 84,534 to 84,291 in the number of properties repossessed by lenders following foreclosure last month over October. These are REOs or lender-owned real estate. But that's off nearly 21% from September's 106,415 REO filings. (Year to date 12.6 of every 1,000 households nationwide have been lost to foreclosure.)

"Certainly some of the drop reflects growing results of government and private efforts to keep homeowners in their homes," says McGee. "But the recovery takes shape when you factor in other things like what the National Association of Realtors calls solid gains from a year ago in existing home sales in some key areas, and the fact that many of the same areas are seeing dropping home prices. Fewer foreclosure actions were initiated in the last quarter, too, according to the latest Mortgage Delinquency Survey from the Mortgage Bankers Association," McGee adds.

"California is a great example of what's happening now and what lies ahead for the housing sector. Long a leader in the subprime mortgage mess and rising numbers of foreclosures, the state's foreclosures have slowed significantly," says McGee.

The latest U.S. Foreclosure Index numbers show November REO filings in the state down to 15,978 in November, down 6.55% from October and off nearly 50% from September. Home prices there have come down, too, as much as 39.4% from the third quarter from a year ago in some areas like Riverside-San Bernardino-Ontario, according to National Association of Realtors numbers. That's left many homeowners that bought their homes at high price points with upside down mortgages?they owe more than the value of the home. But it's also made homes more affordable for plenty of other people. Solid and in many cases rising existing homes sales support that, adds McGee.

In November, another perennial leader in foreclosures, Arizona, saw its REOs and pre-foreclosure filings drop (down 5.19% and 5% respectively), according to U.S. Foreclosure Index numbers.

The pre-foreclosure picture when averaged nationally isn't quite as bright. Pre-foreclosures include notice of mortgage default and/or foreclosure auction. Amid all the negative economic news across the nation, pre-foreclosures for November were up 5.57% from October with 27.1 of every 1,000 households across the country facing some kind of foreclosure action (177,254 vs. 167,906 filings in October). But that's still down nearly 2% and more than 7.5% from March's high, according to U.S. Foreclosure Index analysis.

"Pre-foreclosure numbers likely climb in early 2009 (albeit at a much slower rate than in 2008)" says McGee. "Too many homeowners already are just too overextended and likely won't seek help to work out their delinquent mortgages until after a pre-foreclosure filing against their property. That filing, it seems, is the wake-up call for many to get the help they need and sell" McGee adds.

"Potential homebuyers and investors on the other hand, will find the bargains growing in 2009," says McGee. "As the year progresses more bright spots will emerge, too, both in terms of foreclosure numbers and housing markets as efforts to work with strapped homeowners really begin to take root."

"I wish my crystal ball could pinpoint everything that's going to happen with housing markets in the next 12 months, but there are just too many variables. What I can tell, though, is that hardest hit housing markets have already hit bottom and others will follow in 2009. Third-quarter National Association of Realtor numbers actually show existing home sales picking up in about 20 percent of the areas studied. And, given the uncertainty and volatility of the stock market combined with all time low interest rates, extremely affordable low priced homes, and all the choices out there, 2009 is an excellent time to buy real estate. Properties, especially foreclosed ones, will be highly discounted, lenders are motivated to work with buyers, and the opportunities are abound. The bottom line to keep in mind: What goes down absolutely positively will go back up again.

"The return of solid housing markets is an important part of restoring stability to financial markets. The market will return when mortgage rates and home prices are down, and that's exactly what is happening now in the hardest-hit areas of the country," adds McGee.

This article passed along for information purposes only. Chicago Title makes no endorsement or recommendation as to content.

 

Interesting ………………….

Tuesday, January 13, 2009

Bonds Boldly Go Where They Haven't Gone Before

 

 

 

 

Last Week in Review

 

 

"HAVE THE NERVE TO GO INTO UNEXPLORED TERRITORY." Alan Alda. Taking those words to heart, Bonds and home loan rates did exactly that last week, reaching historic levels.

A few important news items from last week... First, the results are in on the Fed's first run at purchasing Mortgage Backed Securities under their new $500 Billion buying program. Over the last week, the Fed bought $10.2 Billion of Mortgage Backed Securities. Any time there is increased buying demand - for anything - prices will move higher. When Bond prices move higher, home loan rates improve.

Next, Stocks faced selling pressure last week due to a rash of earnings warnings from the nation's retailers, including Macy's, who announced they are closing eleven stores. Because money coming out of Stocks is often parked over into the Bond market, Bonds and home loan rates responded by reaching never-before-seen levels.

Finally, the job market reached a level not seen since 1945. The Labor Department reported on Friday that there were 524,000 jobs lost during the month of December, which you can see in the Jobs Report chart below. Why does the chart look unusual? Because it's measuring a negative number, for something that is normally reported as a positive, as in number of jobs created.

Jobs Report

All told, there were 2,600,000 jobs lost in 2008, which represents the biggest job loss in any calendar year since 1945, when 2,750,000 jobs were lost as the wartime economy was demobilized. But we must consider that there are a lot more people in the US today. Adding further sting to the report was the Unemployment Rate, which shot up higher than expectations to 7.2%, the highest reading in 16 years.

As we know...Bonds and home loan rates typically improve on negative economic news, since money will flow out of Stocks and into Bonds when bad news hits the wires. But keep in mind, these are volatile times - and it's hard to know how long the good times will last for home loan rates. Regardless of if you see a move or a refinance in your future, let's review your situation to determine if any decisions need to be made at this time.

2009 IS LARGELY UNEXPLORED TERRITORY AT THIS POINT...ARE YOU READY? SEE THIS WEEK'S MORTGAGE MARKET VIEW FOR FIVE QUICK TIPS YOU CAN ACT ON RIGHT NOW, TO GET ORGANIZED AND SAVE SOME MONEY TOO!

 

Forecast for the Week

 

 

The Fed's purchasing program will continue to be something to watch in the weeks and months ahead, and there are also several reports that may impact whether Bonds and rates continue to explore new territory during this coming week.

On Wednesday, we will see the Retail Sales Report for December, and since many retailers have already said this holiday season was the worst in a long time, it wouldn't be a surprise if this is a horrible report...which could be friendly for Bonds and home loan rates.

This week also brings news on the inflation (or deflation) front, with Thursday's wholesale measuring Producer Price Index (PPI) Report and Friday's Consumer Price Index (CPI) Report. With the recent concerns on deflation, it will be important to see which way these reports have moved, and what the impact may be on home loan rates.

 

The Mortgage Market View...

 

 

How Ready Are You for 2009?

Now that the holidays are over and a new year has begun, now is the perfect time to make sure you are ready for 2009. Here are five things you should do this month that will make your life easier in the months ahead:

  1. Clean Out the Clutter: You keep saying you'll do it...go ahead and do it. Spend an hour going through your old files, and shred those receipts, bills, and statements you no longer need, like old ATM receipts and utility bills, paystubs more than a year old, and receipts for things that are not deductible.
  2. Get Organized: While you're at it, create new files for your 2009 tax-related papers and receipts. Examples of categories include medical expenses, gift and charitable donations, and home improvements.
  3. Check the Gift Card Fine Print: If you received gift cards as a present over the holidays, use them soon. Some have expiration dates, or the amount on the card may get reduced over time. In addition, in the current economy, retailers that go out of business may not honor gift cards.
  4. Do Some Review: Review your various insurance policies - life, home, auto, etc - to make sure the coverage you have is still the best fit for your needs and situation. To save on cash out of pocket, you might even consider raising your deductible to get a lower premium.
  5. Do Some Reflection: Take an honest look at your schedule and responsibilities and make sure you are taking the time you need to stay healthy and feel good. Don't feel bad about actually scheduling specific blocks of time to exercise or spend special time with family and friends, to ensure it actually happens. This will make everything else you have to do this year easier...and more enjoyable, too!

 

The Week's Economic Indicator Calendar

 

 

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of January 12 – January 16

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Wed. January 14

08:30

Retail Sales

Dec

-1.1%

 

-1.8%

Moderate

Wed. January 14

08:30

Retail Sales ex-auto

Dec

-1.2%

 

-1.6%

HIGH

Wed. January 14

10:30

Crude Inventories

1/09

NA

 

6682K

Moderate

Thu. January 15

10:00

Philadelphia Fed Index

Jan

-35.0

 

-32.9

HIGH

Thu. January 15

08:30

Jobless Claims (Initial)

1/10

NA

 

467K

Moderate

Thu. January 15

08:30

Core Producer Price Index (PPI)

Dec

0.1%

 

0.0%

Moderate

Thu. January 15

08:30

Producer Price Index (PPI)

Dec

-1.9%

 

-2.2%

Moderate

Fri. January 16

08:30

Consumer Price Index (CPI)

Dec

-1.0%

 

-1.7%

HIGH

Fri. January 16

08:30

Core Consumer Price Index (CPI)

Dec

0.1%

 

0.0%

HIGH

Fri. January 16

09:15

Capacity Utilization

Dec

74.7%

 

75.4%

Moderate

Fri. January 16

09:15

Industrial Production

Dec

-0.8%

 

-0.6%

Moderate

Fri. January 16

10:00

Consumer Sentiment Index (UoM)

Jan

60.0

 

60.1

Moderate

 

 

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.

 

 

 

Meghan Knoy
115 E Goodwin Street Suite C
Prescott, AZ 86303

 

Equal Housing Lender          

 

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