Nothing like waiting for the last minute

Think about this for a moment, and then think how idiotic it is. Everyone--buyers, sellers, agents, attorneys and especially lenders--to get deals closed before June 30th, so buyers can take advantage of the first-time buyer $8000 tax credit. Because of the overload, Congress has been considering extending the closing date deadline. So when do they finally vote and approve the extension? Yesterday, a day before everyone needs to close. Your elected representatives, ladies and gentlemen.

The House of Representatives voted on Tuesday to extend by three months the closing deadline for the home buyer tax credit, setting the stage for a possible last-minute reprieve with Wednesday’s deadline looming.

The extension of the tax credit worth up to $8,000 isn’t a “sure thing” yet. The Senate still needs to pass the House measure, and President Obama would have to sign it into law.

The Senate had approved a similar provision earlier this month, but it was included in a larger tax package that failed to secure enough votes when it was considered last week. On Tuesday, Senate Majority Leader Harry Reid (D., Nev.) said he would again try to bring the extension up for a vote, along with other measures, including retroactively reinstating federal unemployment insurance benefits.

In recent weeks, lenders and real-estate companies have warned of bottlenecks that could lead thousands of potential buyers to miss out on the credit that they thought they were getting.

Congress first created a tax credit for homeowners in 2008. It was extended and expanded twice during 2009. The most recent extension said that house purchase contracts would have to be signed by April 30, and home buyers would have until June 30 to close on those sales. The House proposal would give buyers who met April’s contract deadline until Sept. 30 to finalize those purchases. The credit wouldn’t be available to buyers who weren’t under contract before April 30, though the change has raised concerns that some tax-cheats might submit bogus claims.

View original article here: http://blogs.wsj.com/developments/2010/06/29/will-congress-extend-the-tax-credit-closing-deadline/

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.

New Sponsors on www.1000CoolPeople.com

We've had great feedback and response on www.1000CoolPeople.com, our project to inform and entice people to historic downtown Savannah. Check out our updates.

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.

Mortgage rates at lowest point since mid-1950s

I feel like I'm posting this every week, but mortgages are again at historic lows. I speak often about good news/bad news situations. For home buyers and sellers, this is good news. Nothing is ever bad about houses being more affordable for people.

National average for a 30-year fixed loan dips to 4.69 percent

Mortgages are cheaper today than they've been in a half-century. If only most people had the job security, the credit rating and the cash to qualify for one or refinance.

The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddie Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.

Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.

Almost no one expects falling rates to energize the economy, though. Sales of new homes collapsed in May after an enticing tax credit expired.

"As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrate.com.

Rates have fallen over the past two months as investors have become nervous about Europe's debt crisis and the global economy and have shifted money into safe Treasury bonds. The demand has caused Treasury yields to fall. Mortgage rates track those yields.

While mortgages are getting cheaper, low interest rates hurt Americans who are trying to save. Puny rates for savings accounts and CDs are especially hard on people who are living on fixed incomes and earning next to nothing on their money.

Americans normally rush to refinance when rates plummet. But refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent, according to the Mortgage Bankers Association.

Besides, many people who want to refinance — and are able to — have already done it, said Michael Fratantoni, vice president of research and economics at the trade group. And refinancing costs can total several thousand dollars.

"Rates haven't dropped low enough to justify a second refinancing," Fratantoni said. "The group of people who could potentially benefit is much smaller than it was 15 months ago."

Another factor: Many Americans owe more on their mortgages than their homes are worth and can't refinance through the usual channels. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home's value and have their loans guaranteed by mortgage giants Freddie Mac or Fannie Mae.

About 291,000 homeowners have participated as of March — a small fraction of the estimated 15 million homeowners who are "underwater" on their mortgages. And in Nevada and Florida, where home prices have fallen 50 percent or more from their highs, neither record-low rates nor government help can rescue homeowners.

"It's not the desire to refinance. It's the ability to refinance," said Chris Brown, a loan officer with Trinity Mortgage Co. in Orlando, Fla.

Refinancing is generally considered worthwhile for homeowners who can shave at least three-quarters of a percentage point off the rates they pay now and plan to stay in their homes for a long time.

Besides the fees for the mortgage broker or lender, there are fees for title insurance, a new appraisal, document processing and other charges. And in "no fee" mortgages, costs are often added to the loan amount or the interest rate is higher.

To figure the national average, Freddie Mac collects mortgage rates each Monday through Wednesday from lenders around the country. Rates often fluctuate, even within a given day.

Rates on 15-year fixed-rate mortgages fell to an average of 4.13 percent. That was the lowest since at least 1991 and down from 4.2 percent a week earlier.

Rates on five-year adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac's records, which date to January 2005 for those loans.

View the original article here: http://www.msnbc.msn.com/id/37896585/ns/business-real_estate/

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.

Good news, bad news?

If you're a homebuilder, seeing new home sales decrease to record lows is bad. If you're a home buyer, that's not necessarily a bad thing--you should be seeing incentives from builders. And of course we have historically low interest rates. So good news for buyers. Bad news for homebuilders. Story below.

NEW YORK (CNNMoney.com) -- New home sales plummeted to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.

New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April, the Commerce Department reported Wednesday. Sales year-over-year fell 18.3%.

This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.

"We expected a slowdown, but the extent of this decline was a surprise," said Anika Khan, an economist at Wells Fargo. The figure was even worse than her relatively pessimistic forecast of an annual rate of 380,000 in May.

A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.

"Clearly, the lack of a tax credit had a lot to do with it, and it's going to be a bit of a bumpy road ahead as we get a few more months of payback," Khan said.

Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.

Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.

Khan expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.

Although, she added, we are still years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.

"A full housing recovery is contingent on employment," Khan said. "When we see the unemployment rate abate, and some growth in salaries and incomes, we'll get some sustainable momentum in the housing market."

A real estate industry report released earlier this week showed that existing home sales, based closed sales rather than signed contracts, slipped slightly last month but remained elevated.

Price and inventory: The government report showed that the median price of new homes sold in May was $200,900, down less than 1% from April but a 9.6% drop from May 2009.

An estimated 213,000 new homes were for sale at the end of May, the lowest inventory level in more than 40 years.

Still, at the current sales pace, the government expects it will take 8.5 months to sell through that inventory, up from 5.8 months in April. Six months of inventory is considered normal market conditions.

Sales by region: Sales fell the most in the West, where they decreased by more than 50%; the Northwest saw sales declined by about a third. Sales in the South and Midwest declined by about 25%.

View original article here: http://money.cnn.com/2010/06/23/real_estate/new_home_sales/index.htm

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.

$8000 first-time buyer credit extension drama

First-time buyers who were under contract by April 30th and closed by June 30th were eligible for an $8000 tax credit. We had a rush of people getting under contract by April 30th, but now we have a backlog and builders and lenders are having trouble getting these people closed. Historic Downtown Savannah was no exception and we had first-timers looking to take advantage of the tax credit, although not as many as there should have been--I still don't understand why more people didn't take the $8000. Last week the Senate approved a bill to give those buyers an extension on closing until September 30th. I can tell you I've closed all my first-timers except for one, and we are definitely eager to see whether this bill will now be approved by the House, and whether we'll the bill will pass before June 30th. Confused about how a bill becomes a law? A refresher: http://www.youtube.com/watch?v=mEJL2Uuv-oQ

Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.