Massachusetts Home Buyer Guide

Mortgage Rates Increase

Average 30-year, fixed-rate mortgage interest rates increased for the first time in four years, rising to 6.62 percent compared to 6.59 percent the previous week, CNN Money reported August 16, 2007.

The 30-year, fixed-rate mortgage stood at 6.52 percent during the same period last year.

"In its latest report, Freddie Mac said that rates on 15-year fixed-rate loans averaged 6.30 percent in the latest week, up from 6.25 percent last week. A year ago, the 15-year rate averaged 6.20 percent."

Read This Article

What's 'The Donald' Up To?

What's a real estate blog without a little Donald Trump news?

If you're concerned (or just interested) in The Donald's future, check out this CNBC video.

By the way, Trump has an opinion regarding the credit crunch. He believes the Federal Reserve should cut interest rates by a full point. See the August 10, 2007 video from FoxNews.

Trump has this advice for home owners facing foreclosures: Don't just leave. Get a good lawyer and negotiate with the bank.

Mortgage Crisis Likely to Hurt Fall Home Sales

With lenders continuing to tighten lending standards and more and more mortgage brokers predicting the end of 100-percent-financed home loans, the prospects for the Fall home-buying season look dim.

An August 18, 2007 article in The Boston Globe suggests that the current lending environment will result in some potential Massachusetts home buyers having their mortgage application rejected and other home buyers remaining on the sidelines to see if home prices decline further.

Staying on the sidelines might seem like a good idea, but for potential home buyers planning on financing 100 percent of their purchase, that could turn out to be a critical mistake. The 100-percent-financing option may not be available in three to six months.

"Facing dwindling funds from jittery mortgage investors, lenders are tightening requirements for loans, increasing interest rates, demanding larger down payments, or completely withdrawing some mortgage products. The squeeze is being keenly felt in two important segments of the home buying population: first-time buyers with little or no money to put down and those who need jumbo mortgages -- above $417,000 -- which carry higher interest rates because lenders view them as riskier."

Read The Globe Article

Mortgage Applications Rise. Spike Fueled By Fear?

The Mortgage Bankers Association (MBA) reported August 15, 2007 that mortgage applications rose 3.4 percent from the previous week, and the number of applications was up 20.6 percent compared to the previous year.

Some experts believe the spike in applications was fueled by the fear that lenders will continue to tighten lending standards, making it more difficult for some consumers to obtain home purchase and refinance loans.

“Recent upheavals in the mortgage industry may be temporarily increasing the level of retail application activity at the large lenders that participate in the MBA survey rather than representing a system-wide increase,” said Doug Duncan, MBA’s Chief Economist and Senior Vice President of Research and Business Development.

The MBA's survey includes approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

According to a press release, the Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 500,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets, to expand homeownership and to extend access to affordable housing to all Americans. 

Do Investors Really Want To Invest In Your Home?

Apparently there are investors that want to invest in your home. A California company, Home Equity Share, introduces home buyers who can afford monthly payments, but not a 20 percent down payment, and investors who want to get into real estate, but don't want to become landlords or make monthly payments.

The home buyer and investor agree to use a "registered" real estate agent. Once a buyer and investor are brought together, the buyer is pre approved for a loan.

At the end of a specified term (from three to seven years) the buyer can purchase the investor's interest in the property, or together they can sell the house and split any profits. The service is free for investors and home buyers, but they have to use one of the registered real estate agents. Home Equity Share makes money by taking 20 percent of any resulting agent commissions.

The Wall Street Journal recently reported about buying a home utilizing a equity-sharing agreement.

Will Housing Market Impact Consumer Spending?

The slowdown in the housing market has arguably impacted consumer spending. One area that certainly has effected consumers is the tightening of home loan and refinance standards, as well as recent increases in interest rates.

This CNBC video discusses consumer spending, and, more specifically, the mortgage crisis and tightening lending standards.

Some following the lending industry believe that zero-down-payment financing of homes may become a thing of the past. If that is the case, the real estate market certainly is headed for further declines in sales and prices.

Home Improvement Blog

Interested in a blog about home improvement topics? Homeowner's Blog is about "home improvement with an eye towards sustainability."

There's an interesting category about alternate energy and, for those of you considering the purchase of a home with a well, some interesting posts on wells.

NH Faced With Rising Foreclosures

Home foreclosures could reach about 2,000 next year, the Concord Monitor reported August 9, 2007.

The data comes from a report issued by the New Hampshire Bankers Association.

"While subprime loans open the door to homeownership for a greater portion of the population, the mortgages have become increasingly risky. In 2005 and 2006, some borrowers secured mortgages without making a down payment or providing documentation of their income, the report said. Some subprime loans began with relatively low interest rates, or as "interest-only" (where you initially pay only the interest on the mortgage), but later spiked in cost."

Although subprime loans make up only 13 percent of loans in the Granite State, such loans make up 70 percent of the foreclosures, according to the report. The number of subprime loans has surged over the past decade from about 1,700 to about 22,000.

New Hampshire had about 150 foreclosures last year, and is expected to have about 1,800 this year.

"Because housing prices aren't rising and lending standards are tightening, homeowners in need of money will find it difficult to refinance, contributing to foreclosures."

Read This Article

Amherst Center Ranked No. 3 For Singles

Money magazine recently ranked Amherst Center, Massachusetts No. 3 in its top 25 places for singles to live list.

The main reason, obviously, is the University of Massachusetts.

State College, PA, home to Penn State University, ranked No. 1.

Read About The Rest Of The List

NAR Predicts Slower Sales, Prices Leveling Off

USA Today reported August 8, 2007 that existing-home sales in the U.S. should hit a pace of 6.04 million units this year, down from the 6.11 million units the National Association of REALTORS (NAR) predicted last month.

The NAR trimmed its sales forecast for the sixth straight month, but scaled back its predicted drop in existing home values across the country.

According to a NAR press release, existing-home prices should slip by 1.2 percent, in 2007 before rising 2 percent next year. The median new-home price is predicted to fall 2.3 percent in 2007, and then rise 2.3 percent  in 2008.

Read This Article

Read The NAR Press Release

Demand For Garage Spaces Up, Despite Gas Prices

Despite rising gas prices, consumers are increasingly looking for homes with garages that have two or more spaces, the National Association of REALTORS® (NAR) reported in a press release August 7, 2007.

"Since the last survey in 2004, oversize garages saw the biggest growth in terms of what recent buyers considered very important in a home, gaining 16 percentage points to 57 percent. Among buyers who purchased homes without this feature, 56 percent of them said they would have paid more for an oversize garage, compared to only 6 percent in the 2004 survey."

The NAR survey reports responses from buyers who purchased homes in 2006. Home buyers were asked about 75 features and room types to assess the importance of each.

"Other priorities for today’s home buyers include air conditioning, with three out of every four respondents ranking this as “very important,” and a walk-in closet in the master bedroom, which was very important to 53 percent of respondents. Hardwood floors and granite countertops each gained 7 percentage points from the 2004 survey, with 28 percent and 23 percent, respectively, of buyers viewing these features as “very important.” Gaining 6 percentage points was cable/satellite TV-ready, at 46 percent."

The survey also revealed that nearly six out of 10 recent home buyers took on remodeling or home improvement projects within three months of their purchase. Close to half made improvements to the kitchen. About the same amount made improvements to a bathroom.

Read The NAR Press Release

Weston, MA Ranked No. 9 For Top Earning Towns

Money magazine recently ranked Weston, Massachusetts No. 9 on a list of top earning towns in the U.S.

Money describes Weston, MA as follows:

"Great schools, low crime and quaint cultural offerings attract local sports heroes like New England Patriots head coach Bill Bellichick, Boston Celtics legendary forward John Havlicek, and Boston Red Sox first baseman David Ortiz to this Boston suburb. Regis College is a well-kept secret of excellence in education in a prototype bedroom community just 10 miles from Beantown."

Read More About The List

Search the entire MLS for Weston, Massachusetts real estate.

Mortgage Interest Rates Fall

More than a few people have adjusted their home-buying plans because of the rise in mortgage interest rates over the Spring, so recent declines are surely welcome.

The Boston Herald reported August 9, 2007 that average rates for 30-year, fixed-rate mortgage loans in the U.S. stood at 6.59 percent, a decline from 6.68 percent the previous week.

In June, rates on 30-year mortgages climbed to 6.74 percent, an 11-month high. A year ago the same loan had an average rate of 6.55 percent. Average rates on 15-year home loans dropped to 6.25 percent.

Read This Article

Presidential Politics And The Subprime Debacle

Even presidential candidates can't avoid weighing in on the subprime lending debacle (also know as the people-who-never-should-have-ask-for-or-received-a-loan-in-the-first-place problem).

Don't get me wrong. Many people were taken advantage of by less-than-ethical mortgage brokers, but not everybody, and the foreclosure crisis isn't just the result of subprime lending. A lot of homeowners took every last penny of equity out their homes. Then prices dropped: Game over!

Boston Globe Real Estate Editor Andrew Caffrey posted information on the Globe's real estate blog August 8, 2007 from a Senator Hillary Clinton press release that outlines her plans "to crack down on unscrupulous lending and offer assistance to troubled homeowners facing foreclosure."

Of course, the plan provides for a $1 billion taxpayer bailout to assist homeowners facing foreclosure. The money would be provided to states, which would then use the money for state-sponsored programs.

The plan also calls for the elimination of home loans with pre-payment penalties. The release sites an interesting statistic. "Studies have shown that loans with prepayment penalties have a 52% greater risk of default than those without."

Read Senator Hillary Clinton's press release.

Listen to Senator Hilary Clinton speak on this topic.

Mortgage Applications Surge

USA Today reported August 8, 2007 that U.S. mortgage applications jumped 8.1 percent compared to the previous week, the first increase in three weeks.

The Mortgage Bankers Association (MBA) provided the data. The MBA reported that its seasonally adjusted index reached the highest point since early June.

Purchase applications rose 7.4 percent, and refinance applications rose 9.1 percent.

"The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 1.2% ..."

Read This Article