When the Fed lowers interest rates, as it continues to do this month, everyone gets excited and there is a lot of buzz about the real estate market.But – when it comes to you and me – what do these lower interest rates really mean? Here are some examples:
Homeowners: If you already have an adjustable-rate mortgage (ARM) on a home, you could save hundreds of dollars a month if your loan is pegged to Treasury rates, which have fallen considerably thanks to the Fed’s recent cuts. The catch is that many buyers in more expensive areas resort to “jumbo loans,” which are typically pegged to slower-moving indexes that remain elevated.If you have a fixed-rate mortgage (not a jumbo loan), you could consider the cost of re-financing (think origination fees, appraisal fees, closing costs) against the savings of a lower interest rate for your monthly payment.
Borrowers: Several banks lowered their prime rate, which forms the foundation for car loans, home equity lines and other loans. But you must carry a whopping $5,000 credit card balance to save just $12.50 annually from a quarter-point rate cut.
Consumers: Lower rates threaten to boost inflation and the price of imports. So far, inflation has been held in check, and foreign companies generally are holding the line on prices.
Savers: Falling interest rates normally would whack rates on CDs and other savings. But the cash crunch has spurred many banks to prop up such rates.
Travelers: International vacations and business trips cost more because the dollar has sagged in the wake of the Fed’s cuts. But it could be buoyed if other central banks trim rates.
In short, unless you are about to purchase a new home and can take advantage of the new lower interest rates by locking in a fixed-rate mortgage now, you may not end up seeing a whole lot of benefit to the interest rate cuts.
To learn more about Huntsville AL real estate, please visit MoveToHuntsville.com or call me at 256-508-0211.You may also sign up to receive automated emails of new listings at HuntsvilleHomeHunter.com.
As you have likely seen in the news this week, the Fed continues to drop its federal funds rate; the trend continued yesterday as it was slashed again by another half of a percentage point.This move, however, will end mortgage rates’ 5-week record descent, according to Freddie Mac.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.68% for the week ending today, up from 5.48% last week, but still well below its historical average and the 6.34% average we had this time last year, Freddie Mac noted.
“Reinforcing the Fed’s resolution to thwart a recession, the Federal Open Market Committee announced another cut in the target federal funds rate by half of a percentage point in their most recent scheduled meeting,” said Freddie Mac vice president and chief economist Frank Nothaft in a statement today.
Read the full article here, and remember to always contact an experienced Realtor when you are looking for a referral to a reputable lender.
To learn more about Huntsville AL real estate, please visit MoveToHuntsville.com or call me at 256-508-0211.Click here to begin searching for a Huntsville AL home.
Attention, homebuyers!According to the Baltimore Sun, long-term mortgage rates remain in a downward pattern, registering the third consecutive week of decline.
Freddie Mac currently lists the average interest on 30-year fixed loans at 5.69 percent—the lowest level since July 2005. Other rate declines include:
15-year fixed mortgages dropped to 5.21 percent from 5.43 percent a week ago.
5-year adjustable-rate average decreased to 5.4 percent from 5.63 percent.
1-year ARMs fell to 5.26 percent from 5.37 percent..
Observers generally agree that borrowing costs will remain at or near 6 percent for 2008 unless a U.S. recession surfaces—in which case they expect rates to decline further.
We all know that tax season is right around the corner, so this week I wanted to spend some time covering issues related to paying taxes on vacation or investment homes.Many homeowners in Huntsville either have a vacation home elsewhere or own an investment property in town – but can these homes truly be claimed as vacation properties when it comes to taxes?
When and under what circumstances do I have to pay taxes on rental income?
What sort of deductions can owners of rental properties take?
If my vacation home is considered a secondary home (not a rental home), what deductions can I take?
Once you have determined which category your property qualifies as, the chart below gives you a quick overview of what you should expect during tax season:
Vacation-Home Category
Rental Income
Deductions
Losses
Masters
not taxed
not available besides mortgage interest and property taxes
no tax benefit
Secondary
taxed
available
may possibly report a loss if mortgage interest and property taxes exceed rental income; but can’t carry the loss forward or backward to apply to another tax year.
Camping out at home has never been safer inside the fenced yard of this 4-bedroom/2-bath 2,185 square foot brick home in Foxwood Trace. This roomy floor plan delivers a classic dining room with chair rail and French doors, a spacious and sunny great room with a corner wood-burning fireplace, convenient laundry room with shelves and a utility sink, and a user-friendly kitchen with a pantry and large eat-in area. There is also room for everybody with four large bedrooms, including a huge master suite with tray ceiling and master bath with a luxurious corner whirlpool tub, separate shower, linen closet, walk-in closet, and dual sinks. Entering through the large foyer, you’ll notice all of the recent interior paint and high ceilings throughout. The large 3/4 acre treed lot, enclosed with a privacy fence, includes a super-sized patio for entertaining and detached storage; it also backs up to a treed area - no nosy neighbors! The side-entry 2-car garage enhances the curb appeal of this beautiful home.
In this month’s edition of the Market Trends Report, we will re-cap the market activity from 2007 and take a look at the real estate forecast for 2008.
Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier in the year, according to the National Association of Realtors®.
Total existing-home sales nation-wide rose .4% in November 2007, when compared with October 2007, but were still down about 20% from the same time in 2006.
Looking ahead to 2008, Lawrence Yun (Senior NAR Economist) predicts “near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing.”In further good news, he noted “mortgage interest rates are near historic lows, and the most current data shows decelerating price declines along with a modest reduction in the number of homes on the market.”
Yun reminds us, however, that “just like the weather, there are large local variations in home prices” and sales.Let’s take a look at the yearly totals for Huntsville and Madison Counties in 2007 to see what the market looked like when compared with 2006:
Huntsville/Madison County Market Statistics
The Huntsville and Madison County markets remained remarkably stable in 2007, defying many national trends. Sales were down when compared with 2006, but only by 3%. Average list and sale prices, however, both increased by 7% with the average home selling for $197,245 in 2007.
Average market times decreased only slightly, with the average home on the market for 79 days in 2007. The average price per square foot of home went up 5% to $88.
Date
Sold
Listings
Average
List Price
Average
Sale Price
Percent
SP/LP
Average
DOM
Average
Price
SqFt
2007
6,188
$200,398
$197,245
98%
79
$88
2006
6,368
$186,412
$184,037
99%
81
$84
If you are planning to buy or sell a home in 2008, or if you want to learn more about Huntsville AL real estate, please contact me at 256-508-0211or visit MoveToHuntsville.com.To begin searching for Huntsville AL homes, please use my complimentary MLS search.
Statistics are based on information for the North Alabama Association of Realtors and are deemed reliable but not guaranteed.
Did you know thatAlabama is among a hand-full of states that does not require home sellers to tell potential buyers about problems with the house? There are exceptions, however: the Alabama Supreme Court has ruled in previous cases that the seller must disclose issues if they involve health and safety problems.
Recently, a first-time home buyer near Mobile felt she had been mislead not only by her real estate agent but also by the seller. After reportedly choosing to forego a home inspection, the new owner moved in and began to notice problems like rotting wood.
“The Alabama Supreme Court has held that Alabama is a ‘caveat emptor’ state, meaning that it is the duty of the buyer to inspect and make themselves satisfied about the conditions of the property they want topurchase,” said Charles Sowell of the Alabama Real Estate Commission.
Your two best allies in making sure you get a good home inspection prior to making a real estate investment are an experienced Realtor and a licensed and reputable home inspector.To learn more about Huntsville AL real estate or to get a referral to a local home inspector, please call me at 256-508-0211 or visit MoveToHuntsville.com.To receive a complimentary home value analysis, please click here.
Looking for something fun to do with the family now that the holiday season is over?Why not try getting some culture in 2008?There are a host of activities for the entire family to enjoy this January – from art exhibits to theater to sporting events.I encourage you to get out there and enjoy all that Huntsville has to offer!
Click here to see the monthly calendar of events.Even better, click here to sign up for automatic reminders of upcoming events!
If you are planning to buy or sell a home in 2008, please call me at 256-508-0211 or visit MoveToHuntsville.com to learn more about Huntsville AL real estate.To receive a complimentary analysis of your home’s value, please click here.
If you made a new year’s resolution to finally get around to those fix-up projects around the house, you may quickly find yourself overwhelmed – and under-funded – if you try to tackle everything at once.
RealEstateJournal.com has put together a list of pitfalls to avoid when remodeling your home in 2008.
When the Fed lowers interest rates, as it continues to do this month, everyone gets excited and there is a lot of buzz about the real estate market. But – when it comes to you and me – what do these lower interest rates really mean? Here are some examples:
Did you know that Alabama is among a hand-full of states that does not require home sellers to tell potential buyers about problems with the house? There are exceptions, however: the Alabama Supreme Court has ruled in previous cases that the seller must disclose issues if they involve health and safety problems.
Looking for something fun to do with the family now that the holiday season is over?
If you made a new year’s resolution to finally get around to those fix-up projects around the house, you may quickly find yourself overwhelmed – and under-funded – if you try to tackle everything at once.