San Antonio Mortgage News

Home Sales on the Rise

Both new construction sales and pre-owned home sales rose in September according to NAR (National Association of Realtors).  Pre-owned single-family homes, condos, and co-ops rose 5.5% in comparison to August sales.  Nationally in August, 4.91 million units sold in comparison to 5.18 units in September.  Furthermore, we are even beating last years’ September numbers by 1.4% according to NAR. 

          Additionally, new construction single-family homes also saw a rise in sales during September by 2.7%.  Builders continue to use good business sense and are limiting the number of inventory homes they are building.  Numbers show that in August there were 425,000 new construction homes for sale while in September that number was down to 394,000.  In turn, this also decreased the 11 month supply of inventory down by one month; this is great progress towards a less saturated market!

Much of this can be attributed to foreclosures and lower home prices as well as builders trying to clear inventory before the end of the year.  Irregardless, we will take this great news and run with it!  I just want to encourage everyone out there who is trying to sell their home and move on to another home that the numbers are shifting in your favor . . . just hang on a little longer. 

Act Now, Before the Fed Does

The Federal Reserve is scheduled to meet this week and announce its new Policy Statement and Interest Rate Decision Wednesday...and will cut the Fed Funds Rate once again. This is no big surprise. Throughout 2008, the Fed has lowered key interest rates in an effort to stimulate the economy – including cuts in its Fed Funds and Discount Rates earlier this month in an unscheduled meeting. As we know however, cuts in these interest rates do not translate into lower home loan rates. In fact, they typically move in the exact opposite direction. That's the reason I wanted to share this information with you today. If you want to secure a lower mortgage rate, the best time to act could be before the Fed meets and announces its latest cut. In the chart below, notice the pink line. That line represents the interest rate the Fed impacts with its financial policy. As you can see, the line has been consistently lower since January. The blue line, which represents 30-year fixed-rate mortgages, shows that mortgage rates have risen since the first Fed rate cut announcement. So don't wait until Wednesday. Whether you're considering buying a home or refinancing your existing property, call me today. We'll review your individual situation and see what's best for you and your family. And don't believe the hype about credit being impossible to get. Credit standards for many loans have tightened up, but mortgage money is widely available on home purchases for borrowers who can provide documentation and support their mortgage application. And even if you don't have a home loan need at the present time, feel free to check in with me anyway. We can discuss your current situation, plan for the future, and make sure you are in the best possible position for any financial needs that may be coming down the road.

 

San Antonio Makes the list

San Antonio

has been named year after year as a top contender for the best cities to live in as far as housing expense goes and this year is no different.  As many Americans have tightened up their purse strings this year due to the fluctuating economy, affordable housing has become a primary concern.  Take a look at the list below and you’ll see why San Antonio continues to grow in population and why so many builders are still choosing to build in our city.  The following list is from an article on Forbes from October 10, 2008:

Cities Where Resident Get the Most for Their Money

1.     Austin, Texas

2.     San Antonio,Texas

3.   Indianapolis, Ind.

4.     Houston, Texas

5.     Charlotte, N.C.

6.     Columbus, Ohio

7.     Dallas, Texas

8.     Minneapolis/St. Paul

9.     Denver, Colorado

10.     Portland, Ore.

The combination of our city’s status on this list, the incredible supply of homes on the market, the phenomenal interest rates, and the anxiousness of many sellers to get moved before the holiday’s makes right now the perfect time to call our office and talk about your personal financing options that will get your into the home you’ve been pondering over for the past few years. 

Global Banks Unite in Unprecedented Rate Cuts

Ben Bernanke and the Fed brought financial aid to the streets, lowering the Federal Funds Rate and Discount Rate by 0.50%. In an unprecedented emergency move, central banks across the globe joined in lowering interest rates. This move follows Washington's passing of the $700 billion Rescue Plan. From Wall Street to Main Street, a common concern has been heard by Washington. "We need money... no, let me rephrase that...we need cheap money." Rates Could Rise From Here Home loan rates have benefited from the weakness in the financial markets. Fixed rate mortgages remain very attractive. However, the Fed lowers short term interest rates to shore up financial markets. This could cause home loan rates to rise in the coming weeks and months if confidence returns to the stock markets. ARM Holders Take Notice! Anyone that has an Adjustable Rate Mortgage (ARM), take note. The London Interbank Offered Rate (LIBOR) has soared from uncertainty in financial companies...And six million home loans in the United States are tied to LIBOR which determines the interest rate at the time of adjustment. If you know someone with an ARM, let them know potential trouble lies ahead and the time to act is now. What Should You Do Now? Call me. We can go over your situation to determine how you can benefit from the actions. I look forward to hearing from you.

 

Pending Home Sales Numbers Show Positive Gain

The number of pending listings has been down over the past four months as credit criteria had been historically strict before the government takeover of Fannie Mae and Freddie Mac.  I believe that many of the buyers, who were eager to get into a home but not quite over the cusp of meeting qualification numbers, took immediate full advantage of the somewhat loosened criteria.  This, in turn, caused a much needed sharp increase in the number of pending homes in August.  On the website realtor.org stated that according the Pending Homes Sales Index in August pending contracts jumped 7.4 percent to 93.4 from an upwardly revised reading of 87 in July and is 8.8 percent higher than August 2007 when it was 85.8.  In fact, the index has reached its highest level since June of 2007 when it was 101.4.

The increase in pending homes and hopes for results from the Rescue Bill have caused many experts to also predict something that we haven’t seen nationally in a while. . .an increase in home prices!  After national declines of 5-8% this year, 2009 is predicted to have 2-3% increases over the next year.  Also, 30-year fixed-rate mortgage rates are predicted to steady and then increase to around 6.6% by the fourth quarter of 2009.  Just a few more reasons to get out there and buy that house you’ve been eyeing now rather than later!

700 Billion Bail out Bill Passes!

Finally!  Today the $700 billion bailout bill was signed into law by President Bush today.  The bill is aimed at freeing up even more money to be lent out by helping rescue many financial institutions from bad loans they made during the rampant sub-prime boom.  After a week of tension and revisions to the rejected original $700 billion bill the new bill (with the changes stated in yesterday’s blog) passed both the Senate and the House this time.  The House passed the bill with a vote of 263-171 saying that the revised bill offers more protection for individual investors and small businesses through both tax breaks and a revised coverage plan by the FDIC of individual bank deposits. 

MSNBC went on to say that, “House leaders said the difference was lawmakers’ work to shift the focus from the bailout of financial companies to the boost it would give homeowners, small businesses and individual investors.”  There’s been a pretty big misconception with this bill as far as who it was aiming to help but, the truth is that this bill will help stimulate the economy and allow all of us to continue getting loans and making home ownership a true possibility for the average American family.  I can’t tell you what the future holds but I can assure you that the passage of this bill is a fantastic step in the right direction for regaining confidence in the American economy and positively boosting the housing market nationwide.

Local effects from National Downturn

As the San Antonio Business Journal stated today,

San Antonio has remained relatively untouched by the economic crisis going on in much of the nation.  We have seen an incredible amount of economic growth within our city but San Antonio leaders are cautioning that if the crisis were allowed to continue nationally we could see much of our growth come to a slow.  Just another reason to be thankful that the bill passed today which will hopefully turn the nation’s economy in the right direction and leave San Antonio’s continued growth untouched

Are Home Loans Still Available for Me?

I'm sure you've heard before but there really hasn't ever been a better time to buy.  The low interest rates and the high inventory of homes on the market make it a true buyer's market.  I've heard some rumblings out there from my real estate partners, and clients calling in with questions, that there is concern that money isn't available to loan for home loans.  This sentiment couldn't be further from the truth.  At United Lending LLC our business is continuing to grow on a monthly basis with this month turning into one of my personal best months.  And, no, your credit doesn't have to be perfect nor do you have to have a down payment that is higher than your yearly salary to get into a home.  I've listed a few points to help illustrate why it really is a great time to buy and why it is possible for the majority of potential borrowers.

 

8 Reasons that Money is Still Available to Use for Home Purchases

 

1.  Since March of this year new home loans have been of much greater quality, meaning more stable loans held in lenders portfolios

2.  Auctions of 2 year, 5 year and 10 year notes have gone very well (given the economy)
3.  The stock market has taken a great hit which means that many investors pour their money into bonds and mortgage-backed securities which are perceived as a much safer investment.  More money in bonds means more money needs to flow out into the general market to be lent to potential home buyers.  (that yeilds an investors return)

4.  The $700 billion bailout bill will take many bad loans off the books of many financial institutions/banks which will free up more money to be lent out to home buyers

5.  Economists know that the nation must do everything it can to improve the national housing market because historically the economy in general will not improve until the housing marker improves first

6.  FHA and VA lending limits are increasing

7.  More loan products for a wider variety of price ranges for borrowers who can prove their incomes are available.  This includes 103% loans for first time home buyers as well as programs for investors looking to expand their porfolios to seasoned home owners simply looking to downsize or upgrade to the home of their dreams.

7.  The $7500 tax credit is still available for first time home buyers through July 2009

8.  Veterans using the TX Vet program can possibly qualify for a loan with a rate as low as 4.75%

 

 

In summary, the money that is being pumped into our economy needs to be given out in the form of home loans, auto loans, business loans and Credit card purchases to make sense for investors and financial institutions which means that they are trying to make the funds as appealing as possible to borrowers which results in greater interest rates and programs for you than we have seen in a very very long time. 

700 Billion Bailout II

Economic Recovery Act Part II

To log on to the entire new proposed Bill that now goes before the House Go to https://www.namb.org/images/namb/GovernmentAffairs/Senate%20Bill.pdf 

 

Good evening!  The $700 billion bailout plan passed the Senate this evening with a few changes from the original bill earlier this week.  The House is expected to vote this Friday.  This bill has received a bit of bad publicity as many Americans feel that taxpayer’s money will be used to bail out borrowers who made bad financial decisions.  The truth is that the funds are aimed at keeping major financial institutes’ heads above water so that Americans can continue to use credit not only to buy homes, but to purchase cars and open credit cards.  The bills main objective is to purchase assets from troubled financial institutes and free up money for banks to have the ability to continue lending money.

 

Fundamental Facts about the Bill

• Of the $700 billion only $250 billion will be immediately available, the rest will be released in stages
• The Treasury will set up an insurance fund to guarantee companies’ troubled assets and mortgage-backed securities purchased prior to March 14^th of this year
• Stipulations will be placed on bonuses and incentives of Senior Executives of troubled companies to ensure that numbers are being reported correctly
• Two oversight committees will be formed to continue close monitoring

 

Differences from the Original Bill

• The FDIC insurance cap will be raised from $100,000 to $250,000
• The FDIC may borrow funds from the Treasury to cover losses resulting from the new insurance cap
• Tax breaks will be offered to businesses and individuals for using renewable energy
• Research and development tax breaks will be given to many businesses
• Individuals will be able to deduct state and local taxes on their tax returns
• The Alternative Minimum Tax program will continue for another year

 

The Hot Potato is Passed to the House

 

There is a mixture of speculation about whether the bill will pass the House vote on Friday or not.  Some say that they feel the changes will attract more House Republicans while others argue that the tax breaks may actually loose Democratic votes.  We will just have to play the wait and see game again through the rest of the week.