Archive for September, 2009

In 1987 I purchased my first home in Cedar Hills and I felt fortunate to lock in my interest rate at 10.5% for 30 years.  It was truly considered an excellent rate for the time as rates in the early eighties were as high as 20%.  Fast forward to today and we all have been spoiled to think that any rate above 7% is high.

Currently rates on 30 year conforming mortgages are a ridiculously low 4.875%, and homes are not flying off the shelves.  While many factors influence home sales, we have become numb to the single biggest factor, the rate in which we can borrow money.  We all seem to believe 5% will be around forever. 

In thinking about this, it reminded me of some basic paradigms I recall learning about regarding the way the stock market affects mortgage rates.  Generally speaking, if the stock market is booming, investors move their money from mortgage backed bonds into other investment vehicles where they believe they will receive a higher return on their investment.  As a result lending institutions will typically pay a higher yield to encourage the investors to continue investing into mortgage backed bonds.   Once this occurs, mortgage rates increase. 

This brings us to today.   The stock market has been booming as of late and yet, interest rates have been stable at 4.875%.   Why?  The US government is buying mortgage backed bonds to temporarily freeze rates at these historically low levels, hoping to stabilize the housing market; and the program has been working.  However, all good things come to an end and the government will be phasing out this program in 6 months at the end of the first quarter of 2010.  This means we will be back to a “free” market next year and all indicators have been suggesting that a healthy free market business economy cannot survive with interest rates this low. 

So, if you are thinking about making a change for the long run, and would like to lock into a sub 5% 30 year mortgage, then the next 6 months may be the time to make your move.  If you combine this with nice inventory to choose from at prices that in many cases are down more than 20% from their 2006-2007 highs.  The time may be right.  On the other side of the coin, if you are a near term seller, and the government stops subsidizing the bond market next spring,  selling your home now maybe the better moved with today’s attractive low rates.

from NW Mortgage Group 

As of September 25, 2009 (1% loan fee applies)

Rates shown above are based on transactions with a 20% down payment, 1% loan origination fee, 740 credit scores, impounds for property taxes and insurance and 30-day rate lock.  Contact Jeanine Roe or Brian Page of NW Mortgage Group for more information at 503.439.9191.

Lee Davies discusses Financing and what you need to know about getting pre-approved. Lee Davies Real Estate is here to help you with any home purchasing decisions and questions you may have. Call us today 503-292-1500.

Fed Extends Mortgage-Purchase Programs as Consumer Spending Stays “Constrained”.

Full artical below…

http://www.netthinkers.com/wordpress/wp-content/uploads/2009/09/WALLSTREET.pdf

A study shows that people who abruptly and intentionally abandon their mortgages often have high credit scores, in stark contrast with most financially distressed borrowers.

By Kenneth R. Harney

September 20 2009

Reporting from Washington — Who is more likely to walk away from a house and a mortgage — a person with super-prime credit scores or someone with lower scores?

The complete article can be viewed at: http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story

Lee Davies discusses why it is important to have a reputable Home Inspector. Lee Davies Real Estate is here to help you with any home purchasing decisions and questions you may have. Call us today 503-292-1500.

This video topic covers how Lee Davies Real Estate works with Buyers.

Tuesday, September 1, 2009 – At first glance, Ainsworth Elementary school looks like most schools, except for one thing: it has not had a single blade of grass for children to play on. Instead, children have learned to play on the asphalt, inventing games to accommodate the “No Running” policy.Julia Reimann was an avid soccer player, an artist whose pictures jumped off the page, a musician, a loyal friend and a loving sister and daughter. It has been a year since her passing and a lot has transpired. This extraordinary girl has spurred an entire community to raise funds and spirits so that now, where there once was asphalt, there is an expanse of green. The new 130’ x100’ back field is the first of its kind built by Robinson Construction and engineered by CARDNO WRG. This field utilizes Sprinturf ultra blade MM syntheic turf system and, thanks to Nike Grind, incorporates 100% recycled rubber from Nike shoes.

What began just a year ago, as simply a notion has now become reality. The Ainsworth School Julia Reimann Field will be dedicated on September 2nd, 2009 at 5pm. We invite you to join us in a short ceremony as the Reimann Family, Ainsworth Elementary School and the local community come together on this day. Your continued support and strength will ensure this beautiful new field has kids playing on it for generations to come. Immediately following the dedication will be the traditional 5th graders vs. teachers Kickball game to officially kick off the opening of the field.