It might become a little cheaper to buy a home. Part of the government’s economic stimulus package announced Thursday (DETAILS HERE) would boost the size of so-called “conforming” mortgage loans (under $417,000) bought by government-sponsored agencies. That move could allow more borrowers to find lower rates when buying a home or when refinancing an existing mortgage.
The current limit is $362,000 for Federal Housing Administration loans and $417,000 for loans sold to Fannie Mae and Freddie Mac. Interest rates are lower for “conforming” loans, and “jumbo” loans exceeding those amounts have become much harder to get since the credit crunch hit last summer.
Meanwhile, the Mortgage Bankers Association reports today on a mini-refinancing boom nationally. Refi applications are up 92% since November, the group said, and up 16.9% last week from the week before. Refi applications made up 66% of all apps last week. And average rates for 30-year loans, conforming of course, dropped to 5.49% from 5.62% a week earlier.
Thursday, January 24, 2008
Monday, January 21, 2008
Holy Trinity Church to Open Doors in February
Arlington Bishop Paul S. Loverde will dedicate Holy Trinity Catholic Church in Gainesville, Virginia:11 a.m., Saturday February 2, 2008
Holy Trinity Church 8214 Linton Hall Road, Gainesville, VA 20155
“The dedication of the newly-completed Church of the Holy Trinity in Gainesville is not only a blessing for this parish family, but also for our entire diocesan Church. I pray that present and future members of this Parish of the Holy Trinity will experience within these sacred walls the living presence of Jesus Christ, who will unite them in giving praise to God our Father in the power of the Holy Spirit and strengthen them for their witness to truth and to charity in the world,” said Bishop Loverde. (Catholic Herald)
Construction began in February 2006 and was funded by the parish’s Founding Families capital campaign and the Rooted in Faith-Forward in Hope diocesan capital campaign. Photos of the church are available at http://www.holytrinityparish.net/
“We are very excited to finally have a home in Prince William County and we are looking forward to being in our spiritual home; to worship God as a parish and be able to provide the sacraments. Holy Trinity Church is a beautiful setting to glorify God and the Blessed Trinity,” said Father Francis J. Peffley, Pastor of Holy Trinity.
The church’s Irish gothic-style pillars and arches, paired in threes, symbolize the Holy Trinity. A focal point for the 80,000 square foot Church is the main stained glass window, which has three rings made out of pre-cast concrete, weighing over 12 tons. The cost for the church, with furnishings, will total approximately $18 million.
Father Peffley celebrated the parish’s first Mass on July 21, 2001 at the Benedictine Monastery in Bristow, Virginia. Since the parish was established in 2001, Holy Trinity Church has grown from 200 parishioners in 2001 to 5,390 parishioners in 2007. To date, Mass for Holy Trinity parishioners has been celebrated at the Benedictine Monastery, Brentsville District High School, and at other area parishes.
Over 400,000 registered Catholics belong to the 68 parishes of the Arlington Diocese, which has opened six new parishes, three new schools, and established three new missions since 1999. Further information can be found at http://www.arlingtondiocese.org/.
Friday, January 18, 2008
What's Your Risk?
Mortgage insurers PMI published their latest home-price risk study … and guess who’s near the top? PMI economists juggle price momentum, affordability, regional economics and mortgage-payment problems to come up with their index, that translates to chance of home-price declines in the next two years in the 50 top U.S. markets. Here’s the dirty dozen, PMI’s riskiest …
1. Riverside-San Bernardino-Ontario, CA – 94%
2. Las Vegas-Paradise, NV – 89%
3. Phoenix-Mesa-Scottdale, AZ – 83%
4. Santa Ana-Anaheim-Irvine, CA – 81%
5. Los Angeles-Long Beach-Glendale, CA – 79%
6. Fort Lauderdale-Pompano Beach-Deerfield Beach, FL – 78%
7. Orlando-Kissimmee, FL – 74%
8. Sacramento-Arden-Arcade-Roseville, CA – 73%
9. Tampa-St. Petersburg-Clearwater, FL – 72%
10. West Palm Beach-Boca Raton-Boynton Beach, FL – 71%
11. San Diego-Carlsbad-San Marcos, CA – 69%
12. Oakland-Fremont-Hayward, CA – 65%
… 17. Washington-Arlington-Alexandria, DC-VA-MD-WV – 37%
PMI says: “Are we nearing the end of the current housing downturn? We don’t think so, given the magnitude of the run up in housing (with no significant housing downturn since the recession of 1991–92). That doesn’t mean that the level of housing activity has to fall to 1992 levels—after all there are almost 22 million more households today than there were back then, with higher income levels and lower unemployment rates. But the unsustainable surge of 2002–05 has to be worked off, and that’s what’s going on in the housing market today. The famous economist Herb Stein once noted, ‘If something cannot go on forever, it will stop.’ That is probably the best way to view the housing market today. We know that given the combination of demographics, job and income growth, and the level of interest rates, housing demand can’t fall without bounds.”
To read more, CLICK HERE
1. Riverside-San Bernardino-Ontario, CA – 94%
2. Las Vegas-Paradise, NV – 89%
3. Phoenix-Mesa-Scottdale, AZ – 83%
4. Santa Ana-Anaheim-Irvine, CA – 81%
5. Los Angeles-Long Beach-Glendale, CA – 79%
6. Fort Lauderdale-Pompano Beach-Deerfield Beach, FL – 78%
7. Orlando-Kissimmee, FL – 74%
8. Sacramento-Arden-Arcade-Roseville, CA – 73%
9. Tampa-St. Petersburg-Clearwater, FL – 72%
10. West Palm Beach-Boca Raton-Boynton Beach, FL – 71%
11. San Diego-Carlsbad-San Marcos, CA – 69%
12. Oakland-Fremont-Hayward, CA – 65%
… 17. Washington-Arlington-Alexandria, DC-VA-MD-WV – 37%
PMI says: “Are we nearing the end of the current housing downturn? We don’t think so, given the magnitude of the run up in housing (with no significant housing downturn since the recession of 1991–92). That doesn’t mean that the level of housing activity has to fall to 1992 levels—after all there are almost 22 million more households today than there were back then, with higher income levels and lower unemployment rates. But the unsustainable surge of 2002–05 has to be worked off, and that’s what’s going on in the housing market today. The famous economist Herb Stein once noted, ‘If something cannot go on forever, it will stop.’ That is probably the best way to view the housing market today. We know that given the combination of demographics, job and income growth, and the level of interest rates, housing demand can’t fall without bounds.”
To read more, CLICK HERE
Tuesday, January 15, 2008
Dont't Hold Your Breathe
If you are waiting for the Fed to save us, you might want to look elsewhere for your ray of sunshine. In his latest Financial Market Strategies report, Wells Fargo senior economist Eugenio J. Aleman indicates that people banking on a Fed rate cut to spur home sales are looking in the wrong place for help.
In fact, he thinks that even if the Fed slashes rates it would do little to help the market. Here’s his reasoning:
“Let’s say that the Federal Reserve lowers the Federal Funds rate to 2%, does this mean that we are going to start buying homes and U.S. automobiles again? The reason why nobody is willing to buy a home today is not that interest rates are too high; the reason is that home prices are too high. Nobody will want to buy a home today when they know that if they wait they could get the home for a large discount.
“This means that it does not matter what the interest rate is on mortgages; nobody is buying. And thus, it does not matter what the Federal Reserve does with the Federal Funds rate. And I actually believe the Federal Reserve knows this. They are well aware of the ineffectiveness of the Federal Funds rate to help bring back the U.S. housing market and/or the U.S. auto sector. Thus, I still believe that many of the Federal Reserve Governors are going to be reluctant to lower the Federal Funds rate even if they ultimately go ahead with a decrease in the rate on January 30th.”
Aleman argues that the bigger concern for the Fed right now is inflation.
CLICK HERE for full report.
In fact, he thinks that even if the Fed slashes rates it would do little to help the market. Here’s his reasoning:
“Let’s say that the Federal Reserve lowers the Federal Funds rate to 2%, does this mean that we are going to start buying homes and U.S. automobiles again? The reason why nobody is willing to buy a home today is not that interest rates are too high; the reason is that home prices are too high. Nobody will want to buy a home today when they know that if they wait they could get the home for a large discount.
“This means that it does not matter what the interest rate is on mortgages; nobody is buying. And thus, it does not matter what the Federal Reserve does with the Federal Funds rate. And I actually believe the Federal Reserve knows this. They are well aware of the ineffectiveness of the Federal Funds rate to help bring back the U.S. housing market and/or the U.S. auto sector. Thus, I still believe that many of the Federal Reserve Governors are going to be reluctant to lower the Federal Funds rate even if they ultimately go ahead with a decrease in the rate on January 30th.”
Aleman argues that the bigger concern for the Fed right now is inflation.
CLICK HERE for full report.
Friday, January 11, 2008
The End of the Buyer's Market!!!!
It’s not my intent to add fuel to the negative fire, but I am beginning to see the end of the Buyer’s Market. Unfortunately, I think it’s the beginning of a “Lender’s Market.” What do I mean by this?
Seller’s Market = Sellers dictate price and terms (Woe to Buyer)
Buyer’s Market = Buyers dictate price and terms (Woe to Seller)
Lender’s Market = Lenders dictate terms and make it impossible to get a loan (Woe to Everyone)
It’s hard to argue that lenders are returning to the practices that did not fail them in the past. A lender’s bread-and-butter is a 30-year, fixed-rate, conventionally amortizing loan based on 80% of appraised value taking no more than 28% of a borrower’s gross income (36% maximum total debt.) This is what is coming and it will be a catastrophe for sales volumes and home prices.
Why would banks continue to loan 90% of value when there is a likelihood of a greater than 10% decline and banks know high loan-to-value ratios result in high default rates? They are doing it now because they have to in order to make any loans at all. But only the very high FICO scores will qualify, and they are betting these people will not default do to moral reasons or the desire to keep that high FICO score. If they try to extend these loans to lower FICO score individuals or subprime borrowers, they won’t stay in business long. Large downpayments are coming back, and government assisted financing will become widely used by first-time homebuyers to overcome the high equity requirements. What other way is there to move forward?
Why would banks continue to loan 90% of value when there is a likelihood of a greater than 10% decline and banks know high loan-to-value ratios result in high default rates? They are doing it now because they have to in order to make any loans at all. But only the very high FICO scores will qualify, and they are betting these people will not default do to moral reasons or the desire to keep that high FICO score. If they try to extend these loans to lower FICO score individuals or subprime borrowers, they won’t stay in business long. Large downpayments are coming back, and government assisted financing will become widely used by first-time homebuyers to overcome the high equity requirements. What other way is there to move forward?
Zillow improves math, 97% of Washington Metro now covered
Online home-price tracker Zillow says it’s deepened its database and upgraded its valuation math (RELEASE HERE.) The company’’s “Zestimates” have drawn healthy criticism for frequent inaccuracies. However, has more homes are brought into the database, accuracy are expanding down to the county level.
Zillow indicates the Washington Metro data now has 97% of the homes with Zestimates, 41% are within 5% of the selling price, 65% are within 10% of the selling price, and 84% are within 20% of the selling price.
Prince William data has 87% of the homes with Zestimates, 43% are within 5% of the selling price, 68% are within 10% of the selling price, and 90% are within 20% of the selling price.
By the way, Zillow puts typical Prince William home values down 9.0% in a year.
Why not try Zillow out and report back what you find about the homes you know best and the Web site’s “new math” …
Zillow indicates the Washington Metro data now has 97% of the homes with Zestimates, 41% are within 5% of the selling price, 65% are within 10% of the selling price, and 84% are within 20% of the selling price.
Prince William data has 87% of the homes with Zestimates, 43% are within 5% of the selling price, 68% are within 10% of the selling price, and 90% are within 20% of the selling price.
By the way, Zillow puts typical Prince William home values down 9.0% in a year.
Why not try Zillow out and report back what you find about the homes you know best and the Web site’s “new math” …
Thursday, January 10, 2008
58.5% of Moving Vans Arriving in D.C.
United Van Lines’ annual report on where its moving vans take people shows that Washington DC last year again had far more moves IN than relocations out.
United says it had 1,116 (58.5%) inbound moves to DC last year vs. 793 (41.5%) of their business. DC has remained inbound since the inception of the study (1977).
Virginia (51.6%) stayed strong with its 12-year inbound trend. However, Maryland (54.1%) retained its 16-year outbound tradition. Michigan (67.8%) once again captured the top outbound spot, followed by North Dakota (67.2%) and New Jersey (61.0%.) National report IS HERE.
These United Van stats, usually seen as a barometer of management-level relocations, reinforce the notion that many families find the Northern Virginia – D.C. area a good place to call home, particularly due to the strong job market.
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