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What’s the outlook for first-time homebuyers in the Pinellas County real estate market?

One bright spot in the recent residential real estate market has been the opportunities that first-time homebuyers have been able to enjoy. Falling home prices have made it possible for a lot of first-time homebuyers to finally enjoy the benefits of home ownership.

The Obama Administration’s first-time home buyer tax credit (remember that?) contributed to the opportunity, and quite a few people who had never owned a home before were able to buy. In the second quarter of 2010, 46 percent of homebuyers were first-timers.

So what’s happened?

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Tags: first time home buyers, mortgages, Pinellas County real estate

Ready to buy some Pinellas County real estate? Mortgage rates are lowest in 20 years

If the sale of Pinellas County real estate was simply dependent on interest rates, we should be seeing a stampede of homebuyers, because rates are the lowest they have been in 20 years.

According to Freddie Mac, rates for 15-year fixed-rate home loans dropped last week from 3.66 percent to 3.54 percent, the lowest those rates have been since 1991.

Rates for other mortgage profits dropped as well. The average rate for a 30-year fixed mortgage dropped to 4.39 percent, the lowest rate for a 30-year mortgage this year.

Why are real estate mortgage interest rates so low in Pinellas County and elsewhere when there is so much economic uncertainty? Those uncertainties are part of the reason. Mortgage rates follow yields on 10-year U.S. Treasury notes. Weaknesses in the economy have led investors to take money out of the stock market and put it into Treasury bonds. That lowers the yield on the Treasury bonds, and that leads to lower mortgage interest rates.

Congress established Freddie Mac in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. It provides mortgage capital to lenders.

Do those unbelieveably low interest rates make Pinellas County real estate ownership look more attractive to you? Why don’t you give me a call, and we’ll take a look what those rates can mean to you in terms of low monthly mortgage payments.

Call me anytime – 727-643-7100, or beth@bethfrederick.com

Tags: home financing, mortgages, Pinellas County real estate

Why the increase in home sales contract cancellations?

Why do home purchase contracts get cancelled?

You spend weeks or even months searching for just the right home. After a lengthy search, and after kissing a lot of frogs, you find your prince of a home and make an offer. You and the seller finally agree on a price and terms; at last you have a contract!

But instead of everything moving forward smoothly, something happens, and you end up with a cancelled contract.

After all your careful work, how can that be?

Cancelled real estate contracts are one of the side affects of this very difficult real estate market, and they can happen for a multiude of reasons. The National Association of Realtors (NAR) reported this month that real estate sales slipped during the month of June for the third straight month, and one of the reasons was an increase in the number of cancelled sales contracts.

What’s the reason?

No one really knows for sure, but the NAR points out that tighter credit standards might be one reason. If a loan application is unexepectedly rejected because of credit issues, you can say goodbye to your sales agreement. Likewise, tighter appraisals might be a contributing factor; if a home doesn’t appraise for the agree-upon selling price, that can mean another sales contract that ends up going nowhere.

However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders.”

Other possible reasons, according to the NAR: general uncertainty about the nation’s economy, and about the federal budget. That uncertainty may affect home buyers and sellerds as well as mortgage lenders.

Lower limits on loan amounts are scheduled to go into affect on October 1. That is several months off, but some lenders may be applying those lower limits already, anticipating that same current sales may not close before the end of September. That could be having an impact, too.

If you are planning on buying a home in the near future, you may want to call me soon so we can discuss ways of making sure your sales contract stays together until the closing.

I’m always available for a chat at 727-643-7100, or via e-mail at beth@bethfrederick.com

Tags: mortgages, Palm Harbor, pinellas county, real estate, real estate contracts

Home refinance program expanded

     We’ve written here in the past about tax credits and about government programs aimed at saving homes from foreclosure and making home payments more affordable. Now, it looks as though the Obama Administration wants to expand those programs to make them apply to more borrowers than before.
 

    Until now, those government programs have been available to people whose mortgage amounts are up to 105 percent of a home’s value. This week, the administration announced that it wants to raise that limit to 125 percent of value.
Here are some of the conditions that apply:

• The mortgages in question must be owned or backed by Fannie Mae or Freddie Mac.
• The applicants for new financing must be current on their mortgage payments.

     It is estimated that 30 percent of all mortgages are for amounts that exceed their homes’ values.
     The expansion of this federal home refinance program is an acknowledgement that the original program fell far short of expectations. When it was announced in March, the Obama Administration said it hoped that it would help 4-5 million homeowners who were upside-down on their mortgages. But in the middle of June, the administration admitted that only about 20,000 homeowners had applied to refinance their mortgages under the plan.
One problem has been rising interest rates. Current rates are around 5.5 percent, up from 4.84 percent in April. That rate increase has put a damper on refinances. The government hopes that the new expansion will encourage more homeowners to refinance their homes, and those refinances will make the homeowners less likely to default on their mortgages.
     Got a home in Palm Harbor, Dunedin, Clearwater, or anywhere else in Pinellas County with a mortgage bigger than the home’s value? This expanded program may be for you.

Tags: making home affordable, mortgages, pinellas county, refinance

HUD is thinking about energy rating system for homes

Shaurn Donovan

When you buy a new car, you know what that vehicle’s fuel economy will be because that information is contained on a window sticker. Do you think the same sort of information ought to be made available when you buy a new home?
That’s the thinking of the Obama administration. Shaun Donovan, who is secretary of Housing and Urtban Development, says that making energy efficiency information available about new homes would give buyers some important facts when they are shopping for a home. And he says that government-insured mortgages could make additional money available for retrofitted energy-efficient features. The rates on those mortgages could be adjusted downwards, he says, for homes that are energy-efficvient.
Donovan says his thinking applies to new homes as well as older homes that are up for re-sale. He says his department is trying to come up with a scoring system that would help buyers quickly understand the energy efficiency of the home they are considering purchasing. That scoring system would also help lenders decide the rate that should be applied to the mortgage.
And Donovan says there might be other factors that could be incorporated into the scoring system, such as distance from the home to  employment centers. he said that a low-priced home in a distant suburb isn’t much of a bargain if the homeowner has to spend big dollars getting back and forth to work.

Tags: energy, homes, mortgages

Real estate values down big-time during 2008

Just how much can we expect national real estate values to deflate during 2008, once the year comes to an end in the next couple of weeks? One national real estate organization that tracks such things believes the loss will amount to more than $2 trillion — that’s “trillion,” with a “T.”
Zillow is an organization that follows and keeps track of real estate values in the different regions of the country. It says that real estate values in the U.S. declined $1.9 trillion in the first three quarters of the year.
What does that mean? Zillow says it means that 11.7 million households now owe more on their home mortgages than their homes are actually worth. One in seven of all homeowners were upside-down on their mortgages at the end of the third quarter.
That means negative equity, falling values and increasing numbers of forclosures.
Is there any good news in all this? Well, some. First time homeowners are looking at property and buying, and rates continue to be good. Locally, home sales seem to have leveled off. But with so much bad news in so many sectors of the economy, it’s still a time for caution.

Tags: Add new tag, home values, mortgages

Things could be worse…

Are you looking for the abolutely best rock-bottom price on a new home? Do you want to take advantage of the deflating real estate market? Here’s what you do:
Get in your car; drive across the Howard Franklin Bridge or the Courtney Campbell Causeway until you get to Tampa; head for the airport; get on a westbound flight; and don’t stop until you get to Phoenix, Las Vegas or San Francisco.
THAT’S where the real deals are.
According to the Standard & Poor Case Shiller home price index, western housing markets are where the real market collapses are taking place.
According to the index, home prices in the Tampa Bay area declined 18.5 percent between September 2007 and September 2008. That’s a lot, but compare that number to these:

• Phoenix: 31.9 percent
• Las Vegas: 31.3 percent
• San Franciso: 29.5 percent
• Miami: 28.4 percent
• San Diego: 26.3 percent

The national average is 16.6 percent, not really that far away from the Tampa Bay decline. So we should count ourselves lucky. I guess.

Counters

Tags: mortgages