Good News!! Bankrate.com's weekly national survey of large lenders showed that fixed mortgage rates declined this week after six consectutive weeks of rising rates. According to Bankrate.com, the average 30 year fixed rate mortgage decreased from 5.96 to 5.88 percent. Bankrate said that the mortgages in this week's survey had an average of 0.37 discount and origination points.
Richard
Friday, August 19, 2005
Tuesday, August 16, 2005
Price slowing seen in July
Valley-wide real estate statistics show that the rate of increase for home prices in the Valley was at 2% - the lowest monthly rate of increase for this year. This is from the Arizona State University Department of Real Estate and mirrors what we Realtors are seeing in the field with inventories increasing and selling times getting longer.
According to an article in the Arizona Republic today, housing in the overall Phoenix area had prices increase 47% over the past year. The July median cost for a resale home rose to $255,000.
Local pricing increases have been triple the national rate for all of 2005. The expert's prediction (based only one month's data - July) is that the rate of increase will slow over the next several months until it approaches the national average.
According to the article, industry experts predict that the number of sales and price increases will slow but remain at fairly healthy levels.
So, no bubble to burst but it looks like we will have a reduction in the rate of increase in the price of homes.
Stay tuned!
Richard
According to an article in the Arizona Republic today, housing in the overall Phoenix area had prices increase 47% over the past year. The July median cost for a resale home rose to $255,000.
Local pricing increases have been triple the national rate for all of 2005. The expert's prediction (based only one month's data - July) is that the rate of increase will slow over the next several months until it approaches the national average.
According to the article, industry experts predict that the number of sales and price increases will slow but remain at fairly healthy levels.
So, no bubble to burst but it looks like we will have a reduction in the rate of increase in the price of homes.
Stay tuned!
Richard
Mortgage Mania
"Mortgage Mania" was the headline of the Arizona Republic article two days ago describing some of the new and different mortgage options available for home buyers in the Phoenix area (and elsewhere).
Some of these are structured very differently from what you are used to seeing. You need to know the different types to keep your home financing situation under your control.
INTEREST ONLY loans are just that - you are required to pay only the interest charges on a monthly basis. The upsides are lower payments and flexibility (you only pay on the principal when you have the money). But, you can find yourself in a mortgage for a long time if you don't pay the principal down regularly. It requires good financial discipline to manage this loan effectively.
80/20 OR PIGGYBACK loans. This is where the homebuyer gets two mortgages. One for 80% of the value of the home at a normal interest rate, the second for the remaining 20% of the value of the home at a higher rate of interest. The advantage of this type of loan is little or no down payment required to buy a home. Escrow officers tell me that they are seeing a lot of this type of piggybacking now. The disadvantage is that you will have two payments to make each month with one with a pretty high rate of interest. Make sure you can cover both loans and not be "house poor".
OPTION ADJUSTABLE-RATE loans. These loans are new and allow borrowers to pay less than the interest due on a mortgage by deferring part of the payment and adding it to the original loan balance. While it reduces payment amounts, this type of loan could quickly spiral out of control if at least the interest due on the loan isn't paid regularly. These loans offer the lowest payments but you could end up owing more on the loan than what they originally paid for the home.
Knowledge is power. Inform yourself as fully as you can before signing a mortgage. Knowing what you are getting into will go a long way toward keeping you out of future financial trouble with your mortgage.
Richard
Some of these are structured very differently from what you are used to seeing. You need to know the different types to keep your home financing situation under your control.
INTEREST ONLY loans are just that - you are required to pay only the interest charges on a monthly basis. The upsides are lower payments and flexibility (you only pay on the principal when you have the money). But, you can find yourself in a mortgage for a long time if you don't pay the principal down regularly. It requires good financial discipline to manage this loan effectively.
80/20 OR PIGGYBACK loans. This is where the homebuyer gets two mortgages. One for 80% of the value of the home at a normal interest rate, the second for the remaining 20% of the value of the home at a higher rate of interest. The advantage of this type of loan is little or no down payment required to buy a home. Escrow officers tell me that they are seeing a lot of this type of piggybacking now. The disadvantage is that you will have two payments to make each month with one with a pretty high rate of interest. Make sure you can cover both loans and not be "house poor".
OPTION ADJUSTABLE-RATE loans. These loans are new and allow borrowers to pay less than the interest due on a mortgage by deferring part of the payment and adding it to the original loan balance. While it reduces payment amounts, this type of loan could quickly spiral out of control if at least the interest due on the loan isn't paid regularly. These loans offer the lowest payments but you could end up owing more on the loan than what they originally paid for the home.
Knowledge is power. Inform yourself as fully as you can before signing a mortgage. Knowing what you are getting into will go a long way toward keeping you out of future financial trouble with your mortgage.
Richard
Thursday, August 11, 2005
Phoenix Area Home Market Update 8-11-05
Here, for what it is worth, is a clip from a recent Arizona Republic article on future predictions for the Phoenix area home market. This is just one article (among many) and is a point of view to consider (among many) in predicting what might happen in the Phoenix home market.
Home sales likely at or near peak in Valley
Prices predicted to rise 10% in '06
Catherine ReagorThe Arizona RepublicAug. 10, 2005 12:00 AM
Home sales across metropolitan Phoenix are near or at a peak, but any slowing should be less than what is expected nationally.Valley housing analysts are calling for home prices to increase next year by at least 10 percent, double the rate the National Association of Realtors forecast for the U.S. housing market Tuesday in a midyear cautionary report. Metro Phoenix home sales, which so far are 25 percent ahead of last year's record pace, could fall less than 10 percent in 2006.
"No one says the market is going to crash, only that the housing market's growth rate won't continue at this pace," said Jay Butler, director of the Arizona Real Estate Center at Arizona State University's Polytechnic campus. This year, the median price of a U.S. existing home is expected to climb 10.5 percent, to reach $204,000. Through June, the median price of an existing metro Phoenix home had already jumped 32 percent, to hit a record $250,000. Valley home sales and prices likely climbed again in July. Those figures will be released next week. But there are signs the market's frenzy could be ebbing. The past two months, it has taken longer for Valley homes to sell, and the number of homes for sale has climbed.
Home sales likely at or near peak in Valley
Prices predicted to rise 10% in '06
Catherine ReagorThe Arizona RepublicAug. 10, 2005 12:00 AM
Home sales across metropolitan Phoenix are near or at a peak, but any slowing should be less than what is expected nationally.Valley housing analysts are calling for home prices to increase next year by at least 10 percent, double the rate the National Association of Realtors forecast for the U.S. housing market Tuesday in a midyear cautionary report. Metro Phoenix home sales, which so far are 25 percent ahead of last year's record pace, could fall less than 10 percent in 2006.
"No one says the market is going to crash, only that the housing market's growth rate won't continue at this pace," said Jay Butler, director of the Arizona Real Estate Center at Arizona State University's Polytechnic campus. This year, the median price of a U.S. existing home is expected to climb 10.5 percent, to reach $204,000. Through June, the median price of an existing metro Phoenix home had already jumped 32 percent, to hit a record $250,000. Valley home sales and prices likely climbed again in July. Those figures will be released next week. But there are signs the market's frenzy could be ebbing. The past two months, it has taken longer for Valley homes to sell, and the number of homes for sale has climbed.
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