RISMEDIA, Nov. 26, 2008-(MCT/RISMedia)-Following the Fed’s announcement of its plans to buy up to $600 billion in mortgage-backed assets, the housing industry welcomed this solution, citing Main Street and mortgage rates as the direct beneficiaries.”This is one of the key actions we’ve been advocating ever since the Treasury altered its course on how it would use the $700 billion recovery package passed in September. This is great news for home buyers and sellers and we applaud the Fed for taking this historic step,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Housing recovery is the key to economic recovery in this country and it always has been.”
To support the mortgage markets and bring down mortgage rates, the nation’s home builders also called on federal officials to clearly affirm that the government will provide long-term guarantees for the debt and securities purchased by Fannie Mae and Freddie Mac.
Investors are confused over the extent of federal support for long-term obligations held by the housing government sponsored enterprise (GSEs) and that uncertainty has pushed spreads on GSE debt in relation to Treasury yields to record highs, Jerry Howard, president and CEO of the National Association of Home Builders (NAHB), said in a letter to Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart.
“As a result, mortgage rates are at unacceptably high levels, which is forestalling recovery of the housing market and creating a major drag on the economy,” Howard added.
In yesterday’s announcement, the Fed said it would purchase mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae for up to $500 billion. “This will be critical to a housing recovery,” McMillan said.
Lawrence Yun, NAR chief economist, said purchasing debt obligations of Fannie and Freddie is an important move. “We commend the Fed decision because it will directly bring down long-term interest rates,” he said. “The level of investment should be aggressive enough to bring interest rates down in a meaningful manner. As we’ve seen in past recessions, home sales rise when mortgage interest rates fall.”
Yun said that given the present state of the mortgage market, interest rates on 30-year fixed-rate mortgages are too high. “If Fed action brings down mortgage interest rates by even 1 percentage point, it would increase homes sales by 500,000 units. That should help to draw inventory down and stabilize prices.”
Yun said higher home sales are critical now to absorb inventory and stabilize prices. “Only with stabilization in home prices can we have a healthy housing and economic recovery,” he said.
In its announcement, the Fed said it will purchase up to $100 billion of GSE debt from primary dealers through a series of competitive auctions to begin next week. Purchases of up to $500 billion in MBS will be conducted by selected asset managers before year-end. Both the direct obligations and MBS purchases are expected to take place over several quarters.
It also will purchase another $500 billion in mortgage-backed securities, which consist of mortgage loans that are packaged together and sold to investors. These securities, viewed as toxic now because so many mortgages are going unpaid, are at the heart of what’s weighing down troubled banks. Purchasing them is intended to free up bank lending, which would spur the economy.
In addition, Paulson said Treasury will provide $20 billion of credit protection to the Fed from last month’s $700 billion financial rescue package. The protection will be part of a new Fed program that could lend as much as $200 billion to investors in securities backed by credit card, auto and other loans.
Paulson noted that “credit market stresses led to a steep decline in the third quarter of 2008, and the market essentially came to a halt in October.”
Compounding the problem, he said, was that “credit card rates are climbing, making it more expensive for families to finance everyday purchases. This lack of affordable consumer credit undermines consumer spending (and) as a result weakens our economy.”
The new fund aimed at freeing up credit, Paulson said, “will enable a broad range of institutions to step up their lending, enabling borrowers to have access to lower cost consumer financing and small business loans.”© 2008, McClatchy-Tribune Information Services.
Wednesday, November 26, 2008
Thursday, November 20, 2008
Realtors® Tell Congress Increased Housing Demand Will Stabilize the Market
WASHINGTON, November 18, 2008
In a statement to the House Financial Services Committee today, the National Association of Realtors® recommended a four-point plan to stimulate home sales and stabilize housing valuations.
“The only way to overcome today’s economic turmoil is to motivate and encourage worried or cautious housing consumers to enter the marketplace,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Stabilizing the housing market will lead to a quicker and greater economic recovery. Our goal is to ensure there is a healthy market and sufficient capital to support mortgage lending to qualified borrowers.”
NAR developed the plan for consideration by the current lame-duck session of Congress, and for the 111th Congress and the new administration. The four-point plan’s principles are consumer-driven to help foster a housing recovery to support an economic rebound. The plan calls for eliminating the repayment of the first-time home buyer tax credit that was passed in the February stimulus bill, and to expand the tax credit to include all home buyers. The plan also recommends making the increased FHA and conventional loan limits permanent to stimulate home sales and stabilize prices. In addition, the plan urges that the Troubled Asset Relief Program be put back on track by targeting the funds for mortgage relief through a mortgage interest rate buy-down. Finally, the plan recommends finalizing legislation to prohibit banks from entering into the business of real estate brokerage and property management.
“The federal government must ensure there is sufficient capital to support mortgage lending not only in strong markets but also in tumultuous ones,” said McMillan. “Realtors® are frustrated with the current mortgage lending environment that places a variety of barriers on families who wish to buy a home, impeding sales and price stabilization. We look forward to working with the Congress and the new administration to transition out of current instabilities and move toward strong and stable financial and housing markets.”
In a statement to the House Financial Services Committee today, the National Association of Realtors® recommended a four-point plan to stimulate home sales and stabilize housing valuations.
“The only way to overcome today’s economic turmoil is to motivate and encourage worried or cautious housing consumers to enter the marketplace,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Stabilizing the housing market will lead to a quicker and greater economic recovery. Our goal is to ensure there is a healthy market and sufficient capital to support mortgage lending to qualified borrowers.”
NAR developed the plan for consideration by the current lame-duck session of Congress, and for the 111th Congress and the new administration. The four-point plan’s principles are consumer-driven to help foster a housing recovery to support an economic rebound. The plan calls for eliminating the repayment of the first-time home buyer tax credit that was passed in the February stimulus bill, and to expand the tax credit to include all home buyers. The plan also recommends making the increased FHA and conventional loan limits permanent to stimulate home sales and stabilize prices. In addition, the plan urges that the Troubled Asset Relief Program be put back on track by targeting the funds for mortgage relief through a mortgage interest rate buy-down. Finally, the plan recommends finalizing legislation to prohibit banks from entering into the business of real estate brokerage and property management.
“The federal government must ensure there is sufficient capital to support mortgage lending not only in strong markets but also in tumultuous ones,” said McMillan. “Realtors® are frustrated with the current mortgage lending environment that places a variety of barriers on families who wish to buy a home, impeding sales and price stabilization. We look forward to working with the Congress and the new administration to transition out of current instabilities and move toward strong and stable financial and housing markets.”
Wednesday, November 19, 2008
Could You Be Poised To Win In This Housing Market? (helpinghome)
Every set of market conditions has the potential to create both financial losers and financial winners in the marketplace, and the current set of housing market conditions is no exception. It wasn’t that long ago that an exploding “seller’s market” in real estate bloated home prices everywhere. Those who sold their homes cashed in big, often netting tens of thousands of dollars or more from their initial investment only a few years earlier. And, unless those sellers chose to become renters after cashing in (few did), they were immediately faced with the prospect of buying their next home in that same seller’s market. On the whole, some won and some lost.
Today, the tables are turned. It is now a “buyers’ market.” Real estate prices have fallen nationwide. In markets (particularly on the coasts) where housing price inflation had risen the fastest, prices have fallen the farthest. In markets like the Ozarks, the impact is far less extreme. And, just as with any other set of market conditions, a lot of people could be poised to win big in this buyers’ market. And many of them don’t even know the opportunity that lies before them. Who stands to benefit most from making their next move in today’s buyers’ market? Three profiles are poised to take prime advantage:
The cash buyer: In the Springfield/Branson housing market, cash buyers aren’t as uncommon as you might think. Relocations to this area often arrive with savings that go much further than they expected. Retirees from a career at an average income in a high-cost part of the country find their accumulated 401(k) savings add up to considerable wealth in a more affordable Midwestern community. Or, families that sold one of those high-priced homes on one of the coasts learn they can buy twice the home here for half the money they just collected. Cash buyers are well situated because they are not affected by credit limitations or fluctuating interest rates, and they aren’t at the mercy of someone else’s timetable to buy the home they already may own.
The first-time home buyer: For all the media coverage of the nation’s “credit crisis,” local banks are competing with one another to loan mortgage money to qualified borrowers. A first-time home buyer has many advantages. They have no existing home to sell in a buyers’ market. They can take advantage of historically low mortgage rates, even if those low rates may hover a half to three-quarters point higher than some recent rates (since they are not “trading” an existing interest rate for a new one, they have no downside to taking advantage of today’s traditionally low rates). In this buyers’ market, first-time home buyers can make sellers compete for their business. And, if all that weren’t enough, Uncle Sam is even willing to help. First-time home buyers – if they act soon – can receive a $7,500 federal tax credit to help with the purchase of their first home.
The “move-up” buyer: Any buyer planning to buy a home of higher market value than the home they are selling is in position to win big in a buyers’ market. Let’s assume a family is selling a home they believe is worth $100,000, to buy a home they believe is worth $200,000. Too many such buyers are hesitant to make their move because they believe they would “lose” money on the sale of their house in a “depressed housing market. A little quick math proves otherwise. Let’s say the market “depression” equates to about 25% (meaning, homes today will only bring 75% of what they would have brought a couple of years ago). That means that $100,000 home would only bring $75,000. So, the family considering a move has “lost” $25,000, right? Not so fast. In a “down” market, that home won’t be the only one bringing a lower price. The $200,000 home the family wants to buy is also down by 25%. It can be had for a mere $150,000. The family that “lost” $25,000 on the first house turned around and “made” $50,000 on its next home. That’s a net gain of $25,000 in equity! The more “down” the housing market is, the more this type of buyer stands to gain.
In periods of economic difficulty, someone always wins. Why shouldn’t that someone be you? If you fit the profile of one of these three types of potential home buyers, you could win big in today’s housing market – don’t wait!
Today, the tables are turned. It is now a “buyers’ market.” Real estate prices have fallen nationwide. In markets (particularly on the coasts) where housing price inflation had risen the fastest, prices have fallen the farthest. In markets like the Ozarks, the impact is far less extreme. And, just as with any other set of market conditions, a lot of people could be poised to win big in this buyers’ market. And many of them don’t even know the opportunity that lies before them. Who stands to benefit most from making their next move in today’s buyers’ market? Three profiles are poised to take prime advantage:
The cash buyer: In the Springfield/Branson housing market, cash buyers aren’t as uncommon as you might think. Relocations to this area often arrive with savings that go much further than they expected. Retirees from a career at an average income in a high-cost part of the country find their accumulated 401(k) savings add up to considerable wealth in a more affordable Midwestern community. Or, families that sold one of those high-priced homes on one of the coasts learn they can buy twice the home here for half the money they just collected. Cash buyers are well situated because they are not affected by credit limitations or fluctuating interest rates, and they aren’t at the mercy of someone else’s timetable to buy the home they already may own.
The first-time home buyer: For all the media coverage of the nation’s “credit crisis,” local banks are competing with one another to loan mortgage money to qualified borrowers. A first-time home buyer has many advantages. They have no existing home to sell in a buyers’ market. They can take advantage of historically low mortgage rates, even if those low rates may hover a half to three-quarters point higher than some recent rates (since they are not “trading” an existing interest rate for a new one, they have no downside to taking advantage of today’s traditionally low rates). In this buyers’ market, first-time home buyers can make sellers compete for their business. And, if all that weren’t enough, Uncle Sam is even willing to help. First-time home buyers – if they act soon – can receive a $7,500 federal tax credit to help with the purchase of their first home.
The “move-up” buyer: Any buyer planning to buy a home of higher market value than the home they are selling is in position to win big in a buyers’ market. Let’s assume a family is selling a home they believe is worth $100,000, to buy a home they believe is worth $200,000. Too many such buyers are hesitant to make their move because they believe they would “lose” money on the sale of their house in a “depressed housing market. A little quick math proves otherwise. Let’s say the market “depression” equates to about 25% (meaning, homes today will only bring 75% of what they would have brought a couple of years ago). That means that $100,000 home would only bring $75,000. So, the family considering a move has “lost” $25,000, right? Not so fast. In a “down” market, that home won’t be the only one bringing a lower price. The $200,000 home the family wants to buy is also down by 25%. It can be had for a mere $150,000. The family that “lost” $25,000 on the first house turned around and “made” $50,000 on its next home. That’s a net gain of $25,000 in equity! The more “down” the housing market is, the more this type of buyer stands to gain.
In periods of economic difficulty, someone always wins. Why shouldn’t that someone be you? If you fit the profile of one of these three types of potential home buyers, you could win big in today’s housing market – don’t wait!
Tuesday, November 18, 2008
Modern Kitchens and Bathrooms: Tips on Accenting with Light
RISMEDIA, Nov. 18, 2008-Turning your bathroom or kitchen into a modern masterpiece requires attention to several very important areas of design - and lighting is a big one. The right lighting can add sparkle to an otherwise ordinary kitchen or bathroom design and help draw focus and attention to modern faucets, fixtures, kitchen or bathroom accessories and other areas you’d like to showcase.
When establishing your kitchen or bathroom design, there are many new options available that mimic the same interesting, clean lines of your new fixtures.
Some things to keep in mind are:
- Cool colors and modern decor can be made more dramatic with halogen or GE Reveal(R) Bulbs, which give off cool, bright white light. Alternately, to warm up a modern room slightly, chose frosted or coated bulbs, or Soft White bulbs which cast more golden tones.
- Pendant lighting is another contemporary way to brighten your kitchen and put a spotlight on your prep spaces - like over a stainless steel sink to keep your task work well lit.
- On bathroom walls, try sconces that reflect light onto the walls in geometric shapes and boxy patterns; you’ll enhance the feel of the room by accenting sharp lines of modern faucets and bathroom accessories.
With some of today’s more modern faucets, like Moen’s Level Suite or the ShowHouse and Vivid Suites, using a particular detail of the faucet’s design to inspire the other elements of your redesign can go a long way toward tying the entire room together. For instance, the arc or shape of the faucet head or handles, or the color of the glass or plastic accents on kitchen or bathroom accessories can be picked up and carried into your light fixtures and mirrors. As with any design challenge, consistency is paramount.
Use these easy ideas to make your move toward modern today. Or, for a virtual “test drive” of what your new room will look like, try Moen’s interactive Design Center, here: http://www.moen.com/designcenter/athome/articles/index.cfm.
When establishing your kitchen or bathroom design, there are many new options available that mimic the same interesting, clean lines of your new fixtures.
Some things to keep in mind are:
- Cool colors and modern decor can be made more dramatic with halogen or GE Reveal(R) Bulbs, which give off cool, bright white light. Alternately, to warm up a modern room slightly, chose frosted or coated bulbs, or Soft White bulbs which cast more golden tones.
- Pendant lighting is another contemporary way to brighten your kitchen and put a spotlight on your prep spaces - like over a stainless steel sink to keep your task work well lit.
- On bathroom walls, try sconces that reflect light onto the walls in geometric shapes and boxy patterns; you’ll enhance the feel of the room by accenting sharp lines of modern faucets and bathroom accessories.
With some of today’s more modern faucets, like Moen’s Level Suite or the ShowHouse and Vivid Suites, using a particular detail of the faucet’s design to inspire the other elements of your redesign can go a long way toward tying the entire room together. For instance, the arc or shape of the faucet head or handles, or the color of the glass or plastic accents on kitchen or bathroom accessories can be picked up and carried into your light fixtures and mirrors. As with any design challenge, consistency is paramount.
Use these easy ideas to make your move toward modern today. Or, for a virtual “test drive” of what your new room will look like, try Moen’s interactive Design Center, here: http://www.moen.com/designcenter/athome/articles/index.cfm.
Wednesday, November 12, 2008
Springfield Ranks first in Missouri as "Best Performing City" in 2008
Springfield is first among Missouri cities for the fourth year for "creating and sustaining jobs and economic growth."
According to the 2008 “Best Performing Cities” index compiled by The Milken Institute/Greenstreet Real Estate Partners, Springfield ranked 42 overall on the list of the 200 largest metro cities.
This rank is up from 47th in 2007 and 77th in 2005. While no data was available in 2006, Springfield has steadily moved up in the ranks since 2005. In 2008, the index ranked St. Louis at 152 and Kansas City at 77.
The 2008 top ten best-performing metropolitan areas in order were Provo-Orem, Utah; Raleigh-Cary, NC; Salt Lake City, UT; Austin-Round Rock, TX; Huntsville, AL; Wilmington, NC; McAllen-Edinburg-Mission, TX; Tacoma, WA; Olympia, WA; and Charleston-North Charleston-Summerville, SC.
According to the 2008 “Best Performing Cities” index compiled by The Milken Institute/Greenstreet Real Estate Partners, Springfield ranked 42 overall on the list of the 200 largest metro cities.
This rank is up from 47th in 2007 and 77th in 2005. While no data was available in 2006, Springfield has steadily moved up in the ranks since 2005. In 2008, the index ranked St. Louis at 152 and Kansas City at 77.
The 2008 top ten best-performing metropolitan areas in order were Provo-Orem, Utah; Raleigh-Cary, NC; Salt Lake City, UT; Austin-Round Rock, TX; Huntsville, AL; Wilmington, NC; McAllen-Edinburg-Mission, TX; Tacoma, WA; Olympia, WA; and Charleston-North Charleston-Summerville, SC.
Wednesday, November 5, 2008
No Economic Recovery Without Housing Stablilization
WASHINGTON, October 31, 2008
The National Association of Realtors® has stepped up its challenge to lawmakers encouraging them to take new, decisive actions to address the continuing problems in the housing industry, as well as the ongoing economic crisis.
“Our members see firsthand the impact that an unstable housing market is having on communities all across this great country,” said Richard F. Gaylord, NAR president. “The U.S. Treasury and Congress need to work together to ensure that the American people – not Wall Street and large banks – benefit from the economic recovery plan.”
NAR sent a letter last week to U.S. Treasury Secretary Henry Paulson calling on him to refocus the Federal Housing Finance Agency’s efforts on restoring strength to the mortgage-backed securities market, which would help lower mortgage rates for all home buyers and for those who need to refinance.
NAR today provided an economic analysis demonstrating that a reduction, or a buydown, of interest rates by just 1 percentage point could result in up to 840,000 additional home sales and reduce the inventory of homes by as much as 20 percent. Inventories currently at 9.9 months’ supply would decrease to approximately a 7.5 month supply.
“These changes would help stabilize home values and the housing industry,” Gaylord said. “The Treasury Department has gotten off track by focusing too much attention and stimulus money on Wall Street and banks that are in turn using the money for mergers and acquisitions. The administration needs to get back to the original intent of the plan – stabilizing the mortgage and housing markets – to help families avoid foreclosure. Home price stabilization would bring clarity to the valuations of mortgage-backed securities, removing uncertainty in the financial markets and positively affecting the overall U.S. economy.”
A recent consumer survey conducted by NAR member Realogy Corp. reinforces the importance of housing in a broader economic turnaround. The survey found that nine out of 10 homeowners believe that owning a home is still the best long-term investment they can make, but nearly one-third of those surveyed said they were putting plans to buy a new or existing home on hold because of the current economic environment. In a related survey, nearly half of all brokers surveyed said that they would expect sales to increase 10- 25 percent if 4.5 percent mortgage rates were available today.
Realogy President and CEO Richard A. Smith said that substantially lower mortgage rates would stimulate both existing- and new-home sales. “When home sales increase, housing-related consumer purchasing follows, and we would expect this to help lead our economy to a recovery,” he said. Both NAR and Realogy have called on the federal government to take corrective actions that will result in lower mortgage rates.
Federal Deposit Insurance Corp. Chairman Sheila Bair has presented some ideas aimed at helping millions of homeowners by guaranteeing their mortgages. “NAR would support this effort,” said Gaylord. “The government must focus on protecting homeowners and making the dream of homeownership once again attainable. This would help stabilize the housing market and strengthen the national economy.”
Toward this end, NAR submitted a stimulus plan to Congress and the administration earlier this month, calling on Congress to enact a new housing stimulus package that would help boost the economy. The plan includes consumer-driven provisions that would eliminate repayment of the first-time home buyer tax credit and expand the credit to all home buyers, make the increased mortgage loan limits permanent, and focus the economic stabilization efforts on supporting the housing and mortgage markets instead of providing capital to banks with no strings attached.
Reducing the interest rate, combined with removing the home buyer tax credit repayment, would result in an additional 10 percent reduction in inventory, down to a 6.5-month supply, and would produce modest home price gains of 2 to 4 percent. Such price gains would provide up to $760 billion in housing equity recovery for the nation’s 75 million homeowners.
“There is no question – there cannot be an economic recovery without a stabilized housing market. Congress and the new administration need to act immediately to help America’s families protect their homes, savings and futures,” Gaylord said.
The National Association of Realtors® has stepped up its challenge to lawmakers encouraging them to take new, decisive actions to address the continuing problems in the housing industry, as well as the ongoing economic crisis.
“Our members see firsthand the impact that an unstable housing market is having on communities all across this great country,” said Richard F. Gaylord, NAR president. “The U.S. Treasury and Congress need to work together to ensure that the American people – not Wall Street and large banks – benefit from the economic recovery plan.”
NAR sent a letter last week to U.S. Treasury Secretary Henry Paulson calling on him to refocus the Federal Housing Finance Agency’s efforts on restoring strength to the mortgage-backed securities market, which would help lower mortgage rates for all home buyers and for those who need to refinance.
NAR today provided an economic analysis demonstrating that a reduction, or a buydown, of interest rates by just 1 percentage point could result in up to 840,000 additional home sales and reduce the inventory of homes by as much as 20 percent. Inventories currently at 9.9 months’ supply would decrease to approximately a 7.5 month supply.
“These changes would help stabilize home values and the housing industry,” Gaylord said. “The Treasury Department has gotten off track by focusing too much attention and stimulus money on Wall Street and banks that are in turn using the money for mergers and acquisitions. The administration needs to get back to the original intent of the plan – stabilizing the mortgage and housing markets – to help families avoid foreclosure. Home price stabilization would bring clarity to the valuations of mortgage-backed securities, removing uncertainty in the financial markets and positively affecting the overall U.S. economy.”
A recent consumer survey conducted by NAR member Realogy Corp. reinforces the importance of housing in a broader economic turnaround. The survey found that nine out of 10 homeowners believe that owning a home is still the best long-term investment they can make, but nearly one-third of those surveyed said they were putting plans to buy a new or existing home on hold because of the current economic environment. In a related survey, nearly half of all brokers surveyed said that they would expect sales to increase 10- 25 percent if 4.5 percent mortgage rates were available today.
Realogy President and CEO Richard A. Smith said that substantially lower mortgage rates would stimulate both existing- and new-home sales. “When home sales increase, housing-related consumer purchasing follows, and we would expect this to help lead our economy to a recovery,” he said. Both NAR and Realogy have called on the federal government to take corrective actions that will result in lower mortgage rates.
Federal Deposit Insurance Corp. Chairman Sheila Bair has presented some ideas aimed at helping millions of homeowners by guaranteeing their mortgages. “NAR would support this effort,” said Gaylord. “The government must focus on protecting homeowners and making the dream of homeownership once again attainable. This would help stabilize the housing market and strengthen the national economy.”
Toward this end, NAR submitted a stimulus plan to Congress and the administration earlier this month, calling on Congress to enact a new housing stimulus package that would help boost the economy. The plan includes consumer-driven provisions that would eliminate repayment of the first-time home buyer tax credit and expand the credit to all home buyers, make the increased mortgage loan limits permanent, and focus the economic stabilization efforts on supporting the housing and mortgage markets instead of providing capital to banks with no strings attached.
Reducing the interest rate, combined with removing the home buyer tax credit repayment, would result in an additional 10 percent reduction in inventory, down to a 6.5-month supply, and would produce modest home price gains of 2 to 4 percent. Such price gains would provide up to $760 billion in housing equity recovery for the nation’s 75 million homeowners.
“There is no question – there cannot be an economic recovery without a stabilized housing market. Congress and the new administration need to act immediately to help America’s families protect their homes, savings and futures,” Gaylord said.
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