FSBO BLOG

Today, Bloomberg News reported that US Treasuries fell in price, with the gap in yields between 2- and 30-year securities reaching the widest margin since at least 1980, after a $13 billion offering of 30- year bonds drew lower-than-forecast demand. The so-called yield curve touched 372 basis points, the most in at least 29 years, as the bonds drew a yield of 4.52 percent. The so-called yield curve has widened from 191 basis points at the end of 2008.

Lesson #1: The Federal Reserve controls the short term interest and the market place controls the long term interest rates. Todays news is telling us that the market place is anticipating much higher long term interest rates (30 year mortgages fall into this category).

Lesson #2: From 1980 to 1984 long term interest rates sky rocketed, if todays news is the start of a trend, then this could be a repeat.

Lesson #3: Foreign central banks, bought 40.2 percent of today’s auction. They purchased 44 percent at the November sale.

WASHINGTON (AP) — The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week. The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. Add the $8000 tax credit, which also ends next spring and lower home prices, this is it, the bottom is here!

Home prices in 20 U.S. cities rose in August for a third consecutive month, according to S&P/Case-Shiller home-price index, the index climbed 1 percent from the prior month, seasonally adjusted, after a 1.2 percent increase in July, the group said today in New York. Prices are at levels not seen since August 2003 and have fallen almost 30 percent from the peak in May 2006.

Here is a sneak peek of the new FSBO.com homepage…

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We are excited to let you know about some new and exciting changes coming to www.FSBO.com in the coming weeks.  We will launch a newly designed and upgraded website to better serve our customers!

Here are a few benefits of the new FSBO.com site…

YOU MUST CLOSE THE TRANSACTION BY NOV 30, 2009!!!!

Based on recent stories of closings, FSBO.com predicts many real estate closings the last week of November, 2009 will be a real mess. The main reason: the surge in mortgage applications overwhelming lenders. These days most lenders have reduced staff, increased paperwork required to sell the loan, dealt with constantly changing rules by government and many have accepted applications, only to run out of money or go out of business just days before the closing.

Let me know if you have recent experience with a closing delay or problem.

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8/30/09 Sales of existing U.S. homes jumped more than forecast in July to the highest level in almost two years, signaling the housing crisis that crippled the world’s largest economy is easing. Purchases climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007, according to National Association of Realtors.

‘Cash for Clunkers’ definitely helped sell cars and First Time Home Buyer credit has helped boost real estate sales, the problem is that this program ends Nov 30, 2009.  You can expect a surge of closings at the end of November.  Based on current experience, lenders and goverment agencies keep changing their rules to have a successful closing. FSBO.com urges sellers to price your home correctly to take advantage of this surge and buyers to not wait until the last minute.

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According to 20-city index released Tuesday, from financial data company Standard & Poor’s and economists Case-Shiller, showed the value of U.S. homes grew on a monthly basis in May for the first time in nearly three years. “This could be an indication that home price declines are finally stabilizing,” said David Blitzer, chairman of the index committee S&P.  FSBO.com is seeing the rate of foreclosures slowing, the inventory of properties decreasing and the pending sales increasing. While the bad news has slowed down it will still take awhile for the upturn in housing to start. Remember our predicition on March 12th, 2009: “FSBO.com predicts the bottom in housing sales will be in the 4th quarter, 2009, as last minute buyers take advantage of the 1.tax credit expiring 12/31/09  2.low interest rates  3.depressed housing prices”  

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I need a new car, but I would like to own a house, which should I do first?  

The new government incentive ($4500) towards the purchase of a new car is very enticing. At http://www.cars.gov/ you can learn all about the new federal “cash-for-clunkers” program.  One suggestion, if you currently have a paid off ‘clunker’ and are thinking of getting a mortgage to buy that new house, better buy the house first. With no car payment it is easier to get the mortgage approved. If you buy the new car first and have a car loan, that payment works against you when applying for a mortgage.

With a ‘First Time Homebuyer credit’ and a “cash-for-clunkers” program, now is a great time to do something. Prices are down and so are interest rates.

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June 4 (Bloomberg) — Fixed U.S. mortgage rates jumped to the highest level this year, signaling the Federal Reserve’s plan to lower borrowing costs has stalled.  The average 30-year rate rose to 5.29 from 4.91 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today in a statement. The last time the rate was higher was Dec. 11, when it was 5.47 percent. The average 15- year rate rose to 4.79 percent from 4.53 percent