Interest Rates Predicted to Reach 6%

Interest rates are likely to rise to 6 percent by the end of 2010, predicted Amy Crews Cutts, deputy chief economist at Freddie Mac.The end of the Federal Reserve program that buys mortgage-backed securities will drive rates higher because private buyers will demand more return than the Fed.

“Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it’s hard to imagine that the rates can go much lower than they are,” Crews Cutts said. “Anything we get at or below 5 percent is a gift at this point.”

Source: Washington Post, Dina ElBoghdady (12/26/2009)

Exterior Remodeling: Best Bang for Your Buck

Despite a slow market and a slight decrease in the resale value of most remodeling projects, REALTORS® report that the smartest home improvement investments may also be some of the least expensive. Results from the 2009 Remodeling Cost vs. Value Report show that small-scale exterior projects are the most profitable at resale, according to estimates by REALTORS® who completed a recent survey.
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Foreclosures: Ten Reasons for Buyer Caution

Foreclosed homes aren’t always the best deal in town - even if they do come with a price tag that appears to be lower than some other homes in the neighborhood.
Here are 10 reasons why that is true, offered by Vince Mastronardi, president of On-Site Specialty Cleaning & Restoration in suburban Detroit.
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Fed Commits to Holding Down Interest Rates

Fed Commits to Holding Down Interest Rates
The Federal Reserve said Wednesday that it would keep short-term key interest-rate target between 0 and 0.25 percent for an “extended period” - interpreted by many analysts to mean months.
Officials said in a statement after the close of its December meeting that the economy has “picked up,” unemployment is “abating,” and financial conditions have “become more supportive of economic growth.”
The Fed also said Wednesday that it will complete its purchase of up to $1.25 trillion in mortgage-backed securities by March, a decision that could negatively affect the availability of mortgages.

Source: The Wall Street Journal, Jon Hilsenrath (12/17/2009)

5 Questions to Consider Before Purchasing a Home

Interest rates on the benchmark 30-year, fixed-rate mortgage dipped to a 38-year low recently, giving consumers another reason to consider purchasing a home or refinancing their current one.
Freddie Mac recently stated the average rate on a 30-year loan was 4.71% with an average 0.7 point, the lowest rate since the agency began its weekly tracking of long-term interest rates in 1971. A point is equal to 1% of the loan amount, payable as a lump sum at closing. While the decline wasn’t overly dramatic, the dip is likely to get people wondering whether it’s time to sign on the dotted line.
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