FSBO BLOG

Mortgage rates hit the low of the decade in October 2011 and FSBO.com is calling those rates the lowest for the next 10 years. Why? Mortgage rates track the US Govt 10 yr treasury notes and after being pushed down by govt intervention the past two years, the 10 yr was hovering around 3% until mid summer 2011. Then two big items occurred to push the 10yr rate below 2%. First, the European financial crisis caused large (I mean 100’s of billions) of European money to be deposited in US banks as a safe haven. Knowing this could be a short term deposit, US banks bought Treasuries. Second, the Federal Reserve announced in August 2011 that they would buy over $400 billion of 10 yr treasuries. These large purchases by the banks and Federal Reserve are about to end. The European crisis has peaked and will slowly be solved. We think rates are about to go up and fast!

Right now, 11 million borrowers owe more on their mortgages than their homes are worth. To help these homeowners, the govt can either help increase the value or spend money to help refinance. Increasing the value would benefit these 11 million plus the 40 million not under water, thus helping the majority. How do you do that? FSBO.com has been saying for two years, get the govt & bank owned properties into the hands of homeowners/investors. So simple!!

Instead, the govt HARP (Home Affordable Refinance Program ) started in 2009 has helped fewer than 895,000 borrowers. To qualify, borrowers must be making on-time payments on loans owned or guaranteed by Fannie Mae or Freddie Mac.

Sales of existing homes fell in September, with purchases dropping 3 percent to a 4.91 million annual rate.  Homes on the market fell 2 percent to 3.48 million. At the current sales pace, it would take 8.5 months to sell those houses, an improvement from last month. All cash sales continue to be over 30% of the market.

Less inventory will lead to higher prices, which will lead to less people walking away from their homes/mortgaes, which will lead to a housing rebound. Hopefully in the peak spring selling season.

Construction of multifamily homes such as condominiums and apartment buildings increased 15 percent in September as demand for rentals continued to climb according to the Commerce Department.

20 - 30 yr olds are moving out of Mom and Dad’s basement, but they are renting or buying apartments rather than homes.

There’s no secret that vacant/bank owned properties bring down housing values. Well, short sales have increased the past six months because banks are working to get these done. Typically, short sales sell at a discount of about 20 percent to homes not in financial distress, compared with a 40 percent price cut for bank-owned homes. Look for new headlines stating ‘inventories’ have come down.

And Homebuilder sentiment picked up in October to its highest level in a year and a half according to the National Association of Home Builder. Lower inventory and improved traffic.

with a down payment, good job, but bad credit. If you are willing to work direct with a buyer, no agents and no banks, these buyers are out there. Advertise with these words: “owner will carry the paper” or “owner financing available” and the unconventional buyer will find you. Always use an attorney to draw up the paperwork plus give advice. Besdies getting your house sold, these buyers will pay 5, 6 or 7% interest to you, while banks are paying you less than 1%

are Chicago, Detroit, Los Angeles, Philadelphia and Atlanta. All cities had total inventory of properties down over 20% from one year earlier. With demand the same and inventories falling, basic economics tell you price increases are right around the corner. Probably in the spring selling season. If you are a buyer, you better hurry, if you are a seller, goods news very soon.

demand grew last week for both purchases and refinancing according to the Mortgage Bankers Association.  The average loan size for home purchases in September was $210,863.  Refinance share of mortgage activity was 79.1 percent of total applications.

according to the U.S. Bureau of Labor Statistics. Right now there is a pending ‘jobs bill’ being debated. We don’t need a jobs bill, we need an ‘impove the work skills of the unemployed bill’. More skilled workers, means more qualified people to buy homes. Anyone tired of reading or watching business news and all they talk about is politics?

According to Freddie Mac the rate on the 30-year fixed mortgage fell to 3.94 percent from 4.01 percent last week, the previous low. The average rate on a 15-year fixed loan, a popular refinancing option, dipped to 3.26 percent, also a record.

30 yr fixed 4.04% 3.94% 30 yr fixed jumbo 4.82% 4.89% 15 yr fixed 3.38% — 3.26% 15 yr fixed jumbo 4.14% 4.26% 5/1 ARM 3.02% 3.06% 5/1 jumbo ARM 3.17% 3.11%