Historic Rate Cuts Mean Low Mortgage Rates for Home Buyers

U.S. Federal Reserve officials recently slashed official interest rates to an historic low range and signaled they will keep rates "exceptionally low" for some time amid rapidly waning price pressures.

Officials also signaled a new phase for policy in which lending programs financed by the Fed's ballooning balance sheet, a process known as quantitative easing, replace the federal funds rate as the Fed's primary policy tool.

The Federal Open Market Committee voted unanimously to reduce the target fed funds rate for interbank lending from 1% to a range of zero to 0.25%, the lowest since the Fed started publishing the funds target in 1990. The market-determined effective fed funds rate already has hit record lows in recent weeks.

Experts say the new, lower fed funds rate, in conjunction with plans to buy securities backed by mortgages, should keep mortgage rates low into the near future. It looks like Americans think it is a good time to consider a new mortgage for a new home -- the Mortgage Bankers Association reported its application index rose 2.9% for the week ended December 12.

INTEREST RATES
30-Yr. Fixed: 5.19%
15-Yr. Fixed: 4.92%
5 Yr. ARM: 5.60%
1 Yr. ARM: 4.94%
Libor (3 months): 1.47%
Prime: 3.25%
(Source: Nation's Building News Online, week of December 22, 2008)

For more information about mortgage rates from area lenders, you can search for a list of HBA member banks and mortgage lenders (including contact information) by visiting the SpringfieldHBA.com home page and clicking on the "Find-A-Pro" button. Go directly to the HBA home page by clicking here.

KY3: New Home Energy Audit Tax Credits

Contact KY3's Cara Restelli reports on the new Missouri tax credit for home energy audits and implementation of their recommendations. City Utilities home energy auditor John Smith demonstrates a home energy audit. CU Director of Energy Conservation Cara Schaefer and HBA of Greater Springfield Executive Officer Matt Morrow also provide comment on the program. You can watch the video directly from the SpringfieldHBA.com website below, or by clicking here.

No Radon Health Risks Uncovered in New Granite Countertop Study

Responding to unsubstantiated news reports raising concerns over radon radiation in granite countertops, the Marble Institute of America reported on Nov. 17 that in the largest scientific study of the product ever it did not find a single stone slab that poses a health risk.

“Quantities of radon and radiation emitted by stones included in the analysis all fell well below average background levels commonly found in the United States,” the institute said.

The study included more than 400 tests of 115 different varieties of granite countertops — including stones cited in media reports as being potentially problematic, the most common types of granite used in countertops in the U.S. and the more exotic stones that represent a tiny share of the market. The types of stones tested comprise about 80% of those used in domestic countertops.

The study found that:

1. Not one stone slab contributed to radon levels that even reached the average U.S. outdoor radon concentration of 0.4 picocuries per liter — one-tenth the U.S. Environmental Protection Agency level for remedial action within a home.

2. The stones found to emit higher radon levels — though still well below average outdoor background levels — represent less than 1% of U.S. granite countertop sales.

3. Not a single stone emitted radiation levels that even approached a radiation dose of 0.13 milliSievert per year, the level determined by the European Commission to be negligible for human health risk; the U.S. has no such standard. However, this European standard is just 30% of the 1 milliSievert per year annual dose limit recommended for the general public by the National Council for Radiation Protection & Measurements.

“Unlike some media reports of questionable scientific accuracy, this study evaluated a large variety of stones and used a number of complementary, well-established scientific techniques to assess the exposures that people could have to radon and radiation in real-world environments and to determine whether the presence of these specific stones could compromise consumer health,” the Marble Institute said.

“Our study included detailed mapping of radiation emitted from various stones that had areas that we identified as being elevated above levels for typical granite countertop material,” said Dr. John F. McCarthy, president of Environmental Health & Engineering, the independent environmental testing firm that conducted the study.

“We found that it’s easy to get what appear to be high readings of radon or radiation from a small fraction of granite countertops, but those readings do not reflect the actual risk to consumers because they do not assess the real exposure, only isolated, extreme measurements,” he said.

“As with any other type of environmental measurement, assessing the real risk to consumers must take into account more than isolated readings from small spots on a countertop,” McCarthy said. “It must reflect real-world exposure scenarios and be interpreted using well-established principles of environmental health.”

For a list of HBA member professionals who sell and install granite, use our "Find-A-Pro" search feature. Click on the "Find-A-Pro" button on the HBA Home Page; then, enter the word "granite" in the Keyword Search field. Click here for the HBA Home Page!

Could You Be Poised to Win Big in This Housing Market?

Every set of market conditions has the potential to create both financial losers and financial winners in the marketplace, and the current set of housing market conditions is no exception. It wasn’t that long ago that an exploding “seller’s market” in real estate bloated home prices everywhere. Those who sold their homes cashed in big, often netting tens of thousands of dollars or more from their initial investment only a few years earlier. And, unless those sellers chose to become renters after cashing in (few did), they were immediately faced with the prospect of buying their next home in that same seller’s market. On the whole, some won and some lost.

Today, the tables are turned. It is now a “buyers’ market.” Real estate prices have fallen nationwide. In markets (particularly on the coasts) where housing price inflation had risen the fastest, prices have fallen the farthest. In markets like the Ozarks, the impact is far less extreme. And, just as with any other set of market conditions, a lot of people could be poised to win big in this buyers’ market. And many of them don’t even know the opportunity that lies before them.

Who stands to benefit most from making their next move in today’s buyers’ market? Three profiles are poised to take prime advantage: 

• The cash buyer: In the Springfield/Branson housing market, cash buyers aren’t as uncommon as you might think. Relocations to this area often arrive with savings that go much further than they expected. Retirees from a career at an average income in a high-cost part of the country find their accumulated 401(k) savings add up to considerable wealth in a more affordable Midwestern community. Or, families that sold one of those high-priced homes on one of the coasts learn they can buy twice the home here for half the money they just collected. Cash buyers are well situated because they are not affected by credit limitations or fluctuating interest rates, and they aren’t at the mercy of someone else’s timetable to buy the home they already may own.

• The first-time home buyer: For all the media coverage of the nation’s “credit crisis,” local banks are competing with one another to loan mortgage money to qualified borrowers. A first-time home buyer has many advantages. They have no existing home to sell in a buyers’ market. They can take advantage of historically low mortgage rates, even if those low rates may hover a half to three-quarters point higher than some recent rates (since they are not “trading” an existing interest rate for a new one, they have no downside to taking advantage of today’s traditionally low rates). In this buyers’ market, first-time home buyers can make sellers compete for their business. And, if all that weren’t enough, Uncle Sam is even willing to help. First-time home buyers – if they act soon – can receive a $7,500 federal tax credit to help with the purchase of their first home.

• The “move-up” buyer: Any buyer planning to buy a home of higher market value than the home they are selling is in position to win big in a buyers’ market. Let’s assume a family is selling a home they believe is worth $100,000, to buy a home they believe is worth $200,000. Too many such buyers are hesitant to make their move because they believe they would “lose” money on the sale of their house in a “depressed housing market. A little quick math proves otherwise.  Let’s say the market “depression” equates to about 25% (meaning, homes today will only bring 75% of what they would have brought a couple of years ago). That means that $100,000 home would only bring $75,000. So, the family considering a move has “lost” $25,000, right? Not so fast. In a “down” market, that home won’t be the only one bringing a lower price. The $200,000 home the family wants to buy is also down by 25%. It can be had for a mere $150,000. The family that “lost” $25,000 on the first house turned around and “made” $50,000 on its next home. That’s a net gain of $25,000 in equity! The more “down” the housing market is, the more this type of buyer stands to gain.

In periods of economic difficulty, someone always wins. Why shouldn’t that someone be you? If you fit the profile of one of these three types of potential home buyers, you could win big in today’s housing market – don’t wait!

KSFX / KOLR: HBA Home Remodeling Expo Draws Crowd Despite Uncertain Economic Times

The HBA Home Remodeling Expo opened Friday, with a record number of exhibitors and a steady flow of consumers, despite growing anxiety about the national and local economic picture. KSFX (Channel 27), KOLR (Channel 10), and KSPR (Channel 33) all ran news stories Friday night that highlighted the show. To get a feel for Friday's news coverage of the show, you can watch the KSFX story below, or by clicking here. The same story ran on KOLR, with similar coverage on KSPR. Saturday will offer continued media coverage of the Home Remodeling Expo. The Springfield News-Leader is scheduled to run a Saturday article, and KY3's Ozarks Today will broadcast live from the show between 7am and 8am. Saturday hours of operation for the show are 10:00am to 7:00pm. The show will be open Sunday from 11:00am to 5:00pm.

Weigh Your Options Before a "Do It Yourself" Remodel

The HBA's Home Remodeling Expo, which runs October 17-19 at the Missouri Entertainment and Event Center (Fairgrounds) E*Plex, provides homeowners with an excellent opportunity to evaluate their home improvement projects and learn more about hiring a pro when necessary.

"Our seminar, 'Which Remodeler is Right for Your Project?', will help homeowners understand the scope of their projects, answer questions about which permits may be required, and provide tips about how to find the right products and professionals, when necessary," said HBA Executive Officer Matt Morrow. "This is valuable information. According to the U.S. Census Bureau, homeowner do-it-yourself (DIY) projects account for 20 percent of all home remodeling performed nationwide. While there are a substantial number of weekend warriors out there, remodeling industry professionals report that between 25 and 30 percent of their work comes from fixing DIY debacles." That seminar will be offered on Friday, Oct. 17 at 4 p.m., Saturday, Oct. 18 at 1 p.m., and Sunday, Oct. 19 at 3 p.m.

Some credit the desire among homeowners to tackle repair and remodeling projects to hit television show’s like ABC’s “Extreme Home Makeover” and the Discovery Channel’s “Monster House.” The introduction of cable channels with programming dedicated to all things home including HGTV and the DIY Network may inspire homeowners to take on home fixes and decorating challenges as well.

While most professional remodelers understand that homeowners will do some of their own home repairs or small renovations, overwhelmingly they believe that many jobs should be left to the pros. For a full list of your local HBA's remodeling professionals, click here to download the HBA of Greater Springfield's brochure containing profiles of member remodeling contractors.

“The rule of thumb that I always live by is that if a handyman service in your area can do the project, then odds are that a good do-it-yourselfer can do it themselves,” says Bob Birner, CGR, CGB of Amazing Siding Corp. in Houston, Texas. “If they don’t do it, then that’s a good sign that you need a professional.”

Birner adds, “Remodelers wouldn’t perform open-heart surgery on a loved one without medical expertise. Remodeling is open-heart surgery for the home—only professionals should attempt it.”

Still think you can tackle a big remodeling project? Bob Van Cleef, CGR, CGB, GMB, owner of Yankee Housewrights in Jamestown, R.I. cautions all motivated DIYers. “A homeowner should look at a project, consider the worst case scenario and ask, ‘If it comes to this, will I know how to fix it?’” says Van Cleef.

Van Cleef and other professionals admit that when it comes to repairs and remodeling their own homes they hire professionals to do it. “I have been in construction my whole life and I still hire a pro to do work at our house, because there are certain things even I wouldn’t touch such as electrical, plumbing and framing,” says Van Cleef.

Advice for Do-it-Yourselfers
There are some home projects that professional remodelers believe can be tackled by determined DIYers (depending on skill level) such as hanging pictures, interior painting, caulking, changing door knobs and cabinet pulls, and some aesthetic work such as installing crown molding.

If you are willing to put the time and energy into a do-it-yourself home remodel, Barbara Rose Peck, co-owner of S.N. Peck Building, Inc. and Case Handyman Services of Chicago advises:

• Follow product directions. Read everything that comes with the product and take it seriously.
• Get a detailed, illustrated home repair and maintenance book.
• Conduct careful and thorough preparation. Set everything up and protect surrounding surfaces and furniture.
• Practice with the tools.
• Follow safety procedures and use proper safety equipment.

Consumers are cautioned not to take on more than they are capable of doing both in terms of time and skill. “The biggest mistake the weekend handyman makes is to take on a project larger than he can handle in a reasonable amount of time,” says Douglas Nelson, CR, CGR of New Spaces in Burnsville, Minn. “I have talked with people who have been remodeling their kitchen for more than two years.”

When is the Best Time to Buy / Sell Your Home? Maybe Right Now!

From Money Talks News, 2008

With the housing market still in flux, many sellers are wondering when the turnaround will finally come. Fortunately, there are a few signs you can look for that will tell you when things are starting to look up.

While all markets are different, it all boils down to supply and demand.  So first, check on supply.  Ask a local realtor how many unsold homes are in your neighborhood.

What about demand?  If jobs and populations are increasing in your community, so is demand for homes. Find out if your local unemployment rate is going up or down.  Check local job listings in the newspaper or online at sites like Monster and CareerBuilder.com.

Then look at affordability, measured by seeing whether the average paycheck in your area can support the average house payment in your neighborhood.  It’s available for free, for most cities.  See the National Association of Realtors’ Housing Affordability Index

In other words, recognizing a housing turnaround is simple supply and demand.  Try researching trends in your market and see if you can predict housing prices where you live.  Check mortgage rate trends