What do we really need?

I always want to be informative when I write on this blog, but sometimes I am just stumped. There is news out today that FHA may be in financial troubles, they do will (may, don't) have the required reserves that the government imposes. This can and may well be a huge problem in the coming months. Some of the insiders believe it will push FHA to requiring a 5% down payment instead of the current 3.5%. There are arguments on both sides of this issue right now. Some say, if you up the down payment requirement, less people will own, others say that if they can't put 5% into the purchase of their home, should someone really be buying? I am not sure where I sit in this debate. I understand both sides. I also realize that Americans are burdened with debt, because of the images we are sold. Rarely are we happy with what we have, we always want more. Credit in general is very easy to get and that just makes getting what we want that much easier, even if it takes us ten years to pay it back.
I think Americans need a new perspective on the "American Dream." We need to re-evaluate our lives and really see what is important. It will be different for all of us, but I am sure all of us could figure out "things" we could live without.

November 9, 2009

Time just seems to disappear right from underneath us. I cannot believe we have 2 1/2 weeks until Thanksgiving and then Christmas...my son said last night, mom I only have 2 months until I am eleven. I told him he was crazy..then I counted. He was right. It seems that we all live by schedules and due dates and before you know it the days, weeks, months and years have gone by. I think I better get going today, so that I don't miss another minute.

Hooray First Time Homebuyers!!!

The government in their infinite wisdom has extended the first time home buyer credit to June 30, 2010. They added a little more with a $6500 credit to current home buyers who purchase. There are restrictions, but more incentives for buyers. Hopefully that will help keep our real estate market from going down any further.

Not just yet...

Though there is much talk about extending the first time buyer credit, nothing has been ironed out or agreed upon yet. So, that being said, you must close by 11/30/09 to qualify. Also remember, that the county recorder's office (at least in San Joaquin County) will be closed the day after Thanksgiving. Monday the 30th will be a crazy day. Try and get your purchases done by the 25th, to have a happy and stress free end of the month.

A Very Blustery Day!

The weather in the valley has shifted gears, and I wonder if mortgage backed securities are taking their cue from the weather as they have blown upwards and are having a great day. We needed this day, but we will need to be careful this week as any news could change the upwind to a down wind very quickly.
The senate is debating the positives and negatives of extending the first time home buyers credit. We will see if they make any decisions tonight. All markets are waiting for this tid-bit of juicy news.
Stay tuned for more information.

Rates: They are a Climbing

We may have seen the best of the best when it comes to mortgage rates. As the fed slowly turns off the life support, and the market starts standing on its own two feet again, it is likely that rates will do what is expected, and that is climb. For every action there is a reaction and the market has been artificially stopped from reacting to the real news and real data.
Banks are limiting the numbers of homes on the market to try and inflate values, the government is slowing then stopping their purchases, inflation is going to hit and when it does, rates have to move up.
I had a client tell me that his first home in the 1980's had a rate of 16%. It makes 6 and 7% seem tame doesn't it?

Earnings Reports

The stock market rallied this week on relatively good news from earnings from many sectors. Then Bank of America had their conference call and report. They lost $1 billion last quarter. The stock market did not like that news. I will take it for right now as that will buoy bonds today. We have seen profit taking the last few days in the bond market and that means higher interest rates for borrowers.
Advise for buyers or potential buyers on the fence, jump off!!! Rates will not stay at the 5-5.25% range forever. We have been here much longer than anticipated. I know getting a contract on a house right now is difficult, but perseverance and patience will ultimately pay off. Don't get out of the market, cast a wider net.