by starfish on March 13, 2008
Henry Fishkind, of the consulting firm Fishkind & Associates said Tuesday that “2008 is the consolidation year. 2009 and 2010 will be better. I believe we can see the bottom,” referring to the bottom of the current economic cycle.
Home sales, starts and prices have dropped in the region since late 2006, according to industry data. There are now fewer housing starts than sales, Fishkind said. “That’s the first indication of the bottom of the cycle.”
Fishkind expects the national economy to improve later this year after taxpayers start spending Treasury-issued checks. Fishkind said while the tax rebate checks will spur a recovery, he warned that prices would go up.
“There will be some inflation next year,” he warned. As a result, the Federal Reserve will be forced to raise interest rates to squeeze inflation out of the economy.
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by starfish on March 4, 2008
A rising mortgage rate could nullify future price drops
The Florida Association of Realtors reports that too many buyers are focusing on Vero Beach home prices and waiting to jump into the market, afraid that a property bought today will be worth less tomorrow. But rising mortgage rates should also be a concern, and many potential buyers could find themselves out of luck if they wait much longer.
Jim Svinth, chief economist at mortgage firm Lending Tree, tells buyers to “ignore the headlines.” As the economy recovers, finance costs will rise. Waiting for the perfect time to get into the market may cost prospects, especially renters, more in the long run.
“The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher,” says Svinth. Any savings you might incur by a further drop in prices might be offset by rising financing costs.
Let’s take a home priced at $250,000. With a 20 percent downpayment and 30-year fixed-rate mortgage at 6 percent, monthly payments would be $1,199.10 (principal and interest only).
If the price of this home were to drop 10 percent one year from now to $225,000 – but mortgage rates rise to 7 percent – the monthly payment for a 30-year fixed-rate mortgage with 20 percent down would be $1,197.54 (mortgage and interest only) — a difference of $1.56 a month.
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by starfish on March 2, 2008
Six of the nation’s largest mortgage lenders bowed to government pressure and joined forces to give all homeowners who are seriously delinquent on their loans another chance. The lenders have agreed to freeze foreclosures for a month to give borrowers and lenders time to work out a repayment plan.
Named Project Lifeline, the initiative is a step-by-step approach for homeowners who are 90 days or more behind in their mortgage payments, a circumstance that already puts them in serious risk of losing their homes. These borrowers — many of whom have not contacted their lender — could begin receiving letters from them as soon as this week.
“Project Lifeline is aimed at homeowners who face a real risk of losing their home but have not yet addressed the problem,” Secretary Henry Paulson said. “For whatever reasons they have not yet taken action. Our hope is that today’s announcement will reach them and they will reach out immediately for help, especially now that the foreclosure process is upon them.”
“These efforts are to help American families who both want to and can, through a loan modification or refinancing, stay in their homes,” he added.
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