Tuesday, September 21, 2010

Friday, September 3, 2010

MORTGAGE RATES FALL YET AGAIN

This came from the Chicago Sun-Times today, 09-03-10.

Mortgage rates have hit a new record low for the 10th time in 11 weeks as investors continue to turn to Treasury Bonds as a safe haven; the shift in money is cutting yields, which mortgage rates tend to follow.

Freddie Mac reports that 30-year fixed loans averaged 4.32 percent, down from 4.36 percent a week ago; and the 15-year fixed rate fell to a new low of 3.83 percent, down from 3.86 percent.

As I commented in my last posting, this is 'free' money. Does anyone remember the days of 15%, 18%, 21% mortgage rates? Umm.. guess that would telling our age now wouldn't it?

Have a nice Labor Day weekend. Until next time - "Live Aloha"..... Meg

5 Reasons Homeownership Trumps Renting

This is an article from the New York Times, Ron Lieber, August 27, 2010, I thought would be of interest to all renters who are unsure of homeownership. What are your thoughts on this article?
"The seemingly endless run of bad housing news is discouraging some potential home buyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains. The best things about owning a home have a lot more to do with personal comfort and satisfaction.

Here are five of them:

Be your own landlord: The bank can only kick you out if you don't pay; a landlord can be much less dependable - deciding to sell the property or choosing to live there themselves.

Paying the principal is forced savings: Yes, it's possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.

Fixed-rate mortgages never rise - and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.

Good schools: Family-sized rentals are harder to come by in areas with excellent public schools.

Spacious properties in pleasant neighborhoods: Sizeable homes in attractive communities are almost always owned - not rented.

Source: The New York Times, Ron Lieber (8/27/10)

Thoughts:
All very good points.
As a renter, one can never be certain how long they will be able to rent a home. In the S.F. Bay area, to rent in a good school district does, as in any market, command a high price. When inventory for rentals shrinks, it gives the landlord the ability to raise rents. I have never heard of a landlord that "reduced" the rent because of an economic downturn. If one is lucky, instead of a 7% increase yearly, you may see a lower %increase but certainly not a reduction.

As far as "pleasant" neighborhoods, this is very true. If I have had renters relocating to our area and want a specific town (such as Atherton), it is a matter of networking with agents to find out who may have a home that was listed, did not sell but they are up to renting for a year (or two) until the market gets better and then it is back on the market. For someone coming on a 1-2 year assignment, that would work out for them. For anyone else - it is back to the drawing board.

"Rent", is nothing more than throwing your money down a hole. With interest rates at historic lows, it is literally "free money". If one has stable employment, good credit score and can qualify for a loan, be it an FHA loan or conventional, it's a good time to purchase in our area.

Hope you all have a safe and fun Labor Day weekend! Until next time, Live Aloha!! Meg