How The 84,000 Parts Of Inflation Impact Mortgage Rates

May 12, 2008

When the everyday “Cost of Living” increases, our dollars don’t go as far as they used to.  Economists call this inflation. One popular method of measuring inflation is to track prices for 84,000 individual items and lump them together into a “basket”.  If the overall price is higher, then the economy is experiencing inflation. If a […]

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Looking Back And Looking Ahead : May 12, 2008

May 12, 2008

With little economic news to influence trading and despite a late-Friday afternoon spike, mortgage rates edged lower last week. Two weeks ago, when it lowered the Fed Funds Rate by a quarter-percent, the Federal Reserve noted two things: The economy was stabilizing High energy costs threatened inflation In the days that followed, though, the U.S. dollar […]

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The Counties In Which Home Prices Are Rising

May 8, 2008

When real estate news is reported on television or in the papers, it’s usually told as a national story.  Unfortunately, stories like these aren’t helpful for everyday Americans because real estate is not a national market. Real estate is local. The graph above was used by Fed Chairman Ben Bernanke in a speech to Columbia […]

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You’re Not Immune — No Matter What Your Credit Profile Looks Like

May 7, 2008

Four times annually, the Federal Reserve surveys 84 different banks about general banking conditions. One of the survey questions asks about current mortgage lending standards and whether they are loosening or tightening. The chart at right is from the April 2008 survey and it illustrates what we already know: It’s getting tougher and tougher to […]

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Why Free Credit Reports Are Worth What They Cost

May 6, 2008

The ubiquity of “free” credit reporting services like FreeCreditReport.com, TrueCredit.com, and AnnualCreditReport.com have helped breed a new generation of credit-aware Americans. Because credit ratings have more importance to everyday life than in years past, this is a welcome development.  For example: Lenders use credit ratings to determine borrowing rates Insurers use credit ratings to determine […]

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Looking Back And Looking Ahead : May 5, 2008

May 5, 2008

Mortgage rates ended higher last week on stronger-than-expected jobs data, strong consumer spending, and an appetite for riskier investments. But, investors were most excited about the Federal Reserve’s hint that its rate-cutting cycle may be over. The week was quiet until Wednesday when the Federal Reserve voted to lower the Fed Funds Rate by a […]

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Why Mortgage Rates Aren’t Falling Even Though The Economy Is Shedding Jobs

May 2, 2008

According to the Bureau of Labor Statistics, the U.S. economy shed 20,000 jobs in April 2008.  The labor force now counts at 146 million people as employed. Normally, a loss of jobs would foretell economic weakness and would be a good thing for mortgage rate shoppers.  Today, though, traders had been expecting a larger loss of […]

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Why It Doesn’t Matter What The Federal Reserve Does Today

April 30, 2008

The Federal Open Market Committee adjourns from its two-day meeting at 2:15 P.M. ET today. Markets expect the Fed to lower the Fed Funds Rate by 0.250 percent in its press release but it’s not what the Fed does that matters to economy right now. It’s what the Fed says. If the Fed states that […]

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Making English Out Of Fed-Speak (April 2008 Edition)

April 30, 2008

The Fed lowered the Fed Funds Rate by a quarter-percent to 2.000% this afternoon. Because it is tied to the Fed Funds Rate, Prime Rate also fell by a quarter-percent.  Prime Rate is now 5.000%. Holders of home equity lines of credit and credit card debt benefited from the change and will see lower interest costs in next […]

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The 80/20 Rule Applies To Foreclosures

April 29, 2008

RealtyTrac released Q1 2008 foreclosure statistics and the data follows an interesting statistical phenomenon most commonly known as the “80/20 Rule”. The 80/20 Rule states that 80 percent of the effects come from 20 percent of the causes. In this case, 80 percent of bank repossessions in the first three months of 2008 came from […]

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Looking Back And Looking Ahead : April 28, 2008

April 28, 2008

Mortgage markets lost ground last week on inflation concerns and a general feeling that “the worst may be over” on Wall Street. As investors moved money into the stock market, mortgage rates ticked higher for the second straight week. The biggest story from last week was the rising cost of gasoline. Rising energy costs combined with rising […]

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New Home Sales : How The Newspaper Headlines Mislead You

April 25, 2008

Newspaper headlines rarely tell the full story and today’s papers provide a terrific example. From the Baltimore Sun (and others): New-home sales lowest since 1991 8.5% March decline exceeds forecasts; prices also tumble As always, there’s more to the story than the headline. The Census Bureau reported a 8.5 percent decline in New Home Sales last […]

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How To Determine When You’ll Get Your Tax Rebate

April 24, 2008

More than 130 million Americans will receive tax rebates this year as part of Congress’ $168 billion economic stimulus package. Payments begin in about two weeks and range from $600 for individuals to $1,200 for couples, plus an additional $300 per child. Not everyone is eligible for a full rebate, however. For single filers earning […]

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It Doesn’t Matter That The Median Home Sale Price Rose In March 2008

April 23, 2008

The National Association of REALTORS released its Existing Home Sales report for March 2008.  An “existing home” is one that is not considered new construction. A sub-headline in the report showed that the median sales price of all homes sold in March increased by 2.5 percent to $200,700. But don’t assume that the housing market is […]

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Before Co-Signing For A Mortgage, Consider The Deeper Implications

April 22, 2008

As mortgage lenders limit how much money they will lend and to whom, co-signing home loans is growing in popularity. “Co-signing” a home loan is when a third-party — usually a parent or relative — promises to make repayments to the bank in the event that the borrower falls behind on his obligations. Money experts usually […]

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Looking Back And Looking Ahead : April 21, 2008

April 21, 2008

The S&P 500 added 4.3 percent last week — more than during all of 2007 — in what was a good week for the economy and a bad week for mortgage rate shoppers. After Friday’s close, mortgage rates were higher by as much as 0.375% versus the Friday prior.  This reversed a trend of falling […]

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Simple Real Estate Definitions: Average Days On Market

April 18, 2008

In the world of real estate, Days On Market is the number of days between when a home lists for sale and when it goes under contract. It is often abbreviated as DOM. Average Days on Market is a similar statistic but instead of applying to one home in particular, it applies to all homes […]

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Basic Credit Scoring Tips For A Better Mortgage Rate

April 17, 2008

Credit scoring is becoming more important to mortgage pricing so now would be a terrific time to brush up on your credit education. If you understand how the system works, after all, you can make it work to your advantage. One terrific place to start your research is at myFICO.com. Published by credit scoring powerhouse […]

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If History Is An Indicator, Gas Prices Have Another 10 Percent To Rise

April 16, 2008

Average gas prices reached an all-time U.S. high Tuesday, touching $3.40 per gallon.  San Francisco and Tulsa are the nation’s bookends at $3.94 per gallon and $3.11 per gallon, respectively. But before you wonder if relief is coming to your family budget, remember that “rising gas prices” is a conversation we have every April. Using data […]

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Amaze Your Friends With IRS Trivia

April 15, 2008

Today is Tax Day so here’s some IRS-related trivia to share at the water cooler: Did you know… President Lincoln and Congress enacted the first income tax in 1862 to pay Civil War expenses. Did you know… The Civil War income tax was repealed in 1872, revived by Congress in 1894, and ruled unconstitutional by […]

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