Freddie Mac: The average for 30-year, fixed-rate at 6.53 percent

Updated: 7:29 a.m. CT June 8, 2007

WASHINGTON - Rates on 30-year mortgage rose for a fourth straight week, hitting the highest level in 10 months, as bond markets responded to strong employment growth.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.53 percent this week. That was up sharply from 6.42 percent last week and represented the highest point for 30-year mortgages since they averaged 6.55 percent on Aug. 10.

Analysts attributed the increase to recent signs of economic strength outside of the slumping housing market including last week’s report that the economy created 157,000 jobs in May, nearly double the April pace.

Your mortgage payments are only a fraction of what you’ll pay out after you become a homeowner. The total? For this writer, $43,555 in four years, not counting house payments.

By Cameron Huddleston, Kiplinger.com
If you’re entertaining thoughts of buying your first home now that the housing market is cooling off and prices are coming down, take note: The cost of home ownership might be a lot more than you think.

I’m not talking about the down payment or monthly mortgage payments. Although buying a home is a big investment, owning one comes with a new set of expenses you may not have had while renting or living with Mom and Dad. These extras can put a strain on your daily finances if you aren’t prepared.

I know the temptation to buy a house can be strong, especially if you’ve been renting for a while, have gotten married or are ready to start a family. When my husband, Alex, and I moved to Kentucky four years ago from Washington, D.C., where we rented an apartment for six years, I couldn’t wait to buy a house. Since then, we have sold our first home, bought our dream home (well, at least it will be after we do a lot of work on it) and learned plenty about how much it really costs to be homeowners.

So to help you estimate your own cost of ownership and come up with a realistic housing budget, I offer my experience as an example. Below, I itemize the expenses Alex and I have paid over the past four years, complete with dollar amounts. Your own costs will vary depending on the size, condition and location of the house, but this should help you anticipate what you’re getting into. Homeownership comes with a bevy of benefits, but you’ll want to make sure it’s the right move for you at this point in your life before making that long-term commitment.

From mid-project upgrades to building permits and surprise damage — here are the top ways your renovation could blow its budget.

Tamara E. Holmes, Bankrate.com
You’ve planned your home-improvement project responsibly by figuring out how much it will cost and putting money aside accordingly.

But whether the contractor tells you the price is going to exceed his original estimate or you find yourself buying more than you expected, hidden costs can leave you spending much more than you originally anticipated.

These hidden costs can come from a variety of places.

When you hire a contractor, that person gives you an estimate of how much it will cost to have a particular job done. But, “sometimes when a contractor begins doing a job, he finds out that there’s more work involved than he thought,” says Eugene Baldwin, a home-improvement specialist with home-contracting company Amerideck in Clinton, Md.

For example, a roofing contractor might start replacing shingles only to learn that some of the wood beneath the tile is completely decayed and needs to be replaced, as well.

Or a contractor may drill into a wall only to find something behind it that he wasn’t anticipating. “If you get into a job and you need another type of equipment and have to go out and rent it, it will cost the customer more, too,” says Baldwin.

Some hidden costs might not be so hidden if you understand the contract.

“The contract should include a description of the project and a list of what’s excluded from the price,” says Paul Winans, chairman of the board for the National Association of the Remodeling Industry. “It’s almost more important to know what’s excluded than what’s included,” he says.

Certain tools and building materials might be excluded, as well as the cost of the products you want to have installed in your home. If there’s a repair job in which a contractor is not sure of the extent of the damage, he might find that he needs to repair or replace a larger portion of the home than he originally thought.

Costly upgrades
Sometimes homeowners are directly responsible for unexpected costs. For example, halfway through the task of having your bathroom renovated, you might decide you want to upgrade your tile or choice of shower fixtures. Unless you choose your brands or products before the estimate is completed and stick with them, be aware that your choices will affect the total cost of the project.

Another factor that can cause the price to fluctuate is the cost of building supplies. If the job is one that will take a long period of time, or if you received your estimate several months before the actual work began, there’s a chance that the price of supplies used to complete the project will increase. If this happens, your bill may rise accordingly. If your contractor includes the cost of supplies in his estimate, ask him before you sign the contract whether those costs are subject to change.

The best way to prepare for hidden costs is to ask the contractor upfront which costs he expects to rise.

To prepare mentally, you can ask the contractor’s references whether the final costs of their projects exceeded the estimates, and by how much. Those references can also tell you what the hidden costs were. If a contractor has a history of estimating too low, you can either find another contractor, or you can anticipate and prepare for a higher final price.

Also, make it clear at the beginning of the project that you want the contractor to let you know the minute he knows the project will cost more than expected so you have time to get your finances ready.

Do-it-yourself dues
Do-it-yourselfers aren’t immune to hidden costs. They, too, can find themselves paying more for a project than they originally anticipated.

One hidden cost that many homeowners don’t think about is permit fees. Depending on the type of work you’re doing on your home, you may be required to apply for a work permit. For example, a building permit is generally required from local building-inspection authorities for work that changes or adds to the structure of your property. Other permits you may need, depending on the project, are for electrical, mechanical and plumbing work. Often, you must pay an application fee in addition to the cost of the permit. Permit costs are generally based on the estimated construction cost of the project.
Another place a DIYer might underestimate a project is when coming up with all of the supplies and tools needed. Unless the job is one that you’ve done before, chances are pretty likely that there is a piece of equipment you’ll forget to list or there is a tool that might make the job easier. If you’re doing a task for the first time, always give your budget some breathing room for supplies you didn’t think about.
Unfortunately, another hidden cost could arise from breaking something and having to fix it.

“If you have Home Improvement questions Build Advice has helped may Do-it-yourselfers”
 
For that reason, it’s important that you be very knowledgeable about a project before attempting to do it yourself. 

“Look up how to do the smaller projects that not only are in your budget but your expertise level so you don’t have to call and have a contractor come in” to clean up after you, Faunt says.

A home-improvement project can be one of the most rewarding investments you can make. But when coming up with your budget, make sure you include room for the unexpected costs that are likely to arise. That way, you can spend more time enjoying your improvements and less time worrying about how you’re going pay for them.

90% leap over last year; figure pushed up by slowing real estate market, subprime meltdown.

 June 12 2007: 3:23 PM EDT

Sunday June 10, 2:16 pm ET

By Alex Veiga, AP Business Writer
 
Wannabe Buyers Welcome Housing Market Slump, but Lenders Tighten Mortgage Standards

LOS ANGELES (AP) — Kurt Montufar isn’t stressing over the housing slump. He’s actually hoping things get worse. Like many wannabe homebuyers who were priced out of the market during the last boom, Montufar spends time these days scanning real estate ads and news reports to determine if it’s time to take the plunge and buy.

 Foreclosures rising? Great. Cash-strapped sellers pressured into lowering prices because they can’t find buyers? Even better.

“Somebody else’s misfortune could be my happy ending,” said Montufar, 27, a resident of suburban Los Angeles.

Indeed, the advantage is shifting to buyers in many previously high-flying housing markets, as homes take longer to sell and prices level off or begin to fall.

Modest annual declines have been seen in cities such as San Diego, Boston, Las Vegas, Phoenix and Honolulu, according to first-quarter data on existing single-family homes compiled by the National Association of Realtors.

Meanwhile, price gains of just 1.4 percent or less were reported in New York, Chicago and Washington, D.C.

Those numbers have left many people trying to “time” the market to take advantage of the slump. But experts said that can be risky because there is little consensus on how long the current doldrums might last.

In addition, the market forces that helped drive the housing boom — affordable financing and the alluring prospect of escalating home values — are no longer a given. Potential price breaks could be wiped out if interest rates rise any higher.

“In general, it is very difficult to time the market,” said Raphael Bostic, associate director of the University of Southern California’s Lusk Center for Real Estate.

“The real problem with that is you don’t know when the floor is until after it’s passed. If the floor is right now, you missed it,” he said.

Montufar, an asset manager and part-time real estate agent, has little choice about waiting for prices to fall further.

He would like to pay about $500,000 for a home in the San Fernando Valley. However, the properties he has been eying are still priced at about $650,000.

“At this point, I’ve got no choice but to wait and see … how low they get so that it gets to a point where I can afford it,” he said.

Others have already seized opportunities to buy.

Melanie Scalice, 36, a seventh-grade teacher living in the Boston suburb of Arlington, Mass., saved for years for a home. She decided to jump into the market when local housing prices began to dip after years of double-digit percentage increases.

“The timing has been great,” Scalice said. “With prices going down, there’s so much for sale that I had a lot to choose from.”

Still, she had to go to Fitchburg, some 40 miles from Arlington, to find a home that suited her budget and need for space. She settled on a $199,000 condominium.

Areas outside big markets may still represent the best option for finding an affordable home.

“There are areas where prices will, at worst, stay flat, but probably continue to go up,” said Patrick Lashinsky, CEO and president of Emeryville, Calif.-based ZipRealty Inc.

Home prices haven’t lost much steam in the Northwest. Seattle’s metro area, for example, saw its median price soar 12.3 percent during the first quarter.

In California, where home values more than tripled since 1995, sales have been lagging and price appreciation has slowed or fallen in major metro areas.

Prices have declined sharply in regions that saw major home or condo construction in recent years, such as Riverside, San Bernardino and San Diego counties.

Even if prices fall further, it could be tough for buyers to find affordable financing if interest rates increase much more.

The Federal Reserve raised the federal funds rate from 1 percent to 5.25 percent between June 2004 and June 2006. The rate, which can affect mortgages, has held steady since then.

Meanwhile, the monthly average interest rate for a 30-year fixed mortgage crept from a low of 5.23 percent in June 2003 to 6.26 percent last month, according to mortgage giant Freddie Mac.

In addition, lenders have tightened standards in response to a surge in defaults by subprime borrowers, and a number of subprime lenders have gone out of business altogether.

A number of wannabe buyers are pinning their hopes on foreclosures, which some studies predict will explode during the next two years as adjustable mortgages reset to higher interest rates.

Foreclosure activity jumped 62 percent nationwide in April from the year-ago period, according to Irvine-based RealtyTrac Inc. Among the states with the highest foreclosure rates were Nevada, Colorado, Connecticut, Florida and California.

Gino Barragan of La Puente, Calif., a lifelong renter, was among the hundreds of people who attended a recent auction looking for a good deal on a foreclosed home.

Barragan, 34, was hoping to find a condo costing less than $300,000. He found only one that he liked within his price range.

“I am willing to wait, but I’m keeping my eyes open,” said Barragan, a teacher.

Bruce Norris, president of The Norris Group, a real estate investment company, said now might be the best time to purchase a home, if the buyer plans to live there for 10 years.

“I’m not sure that I wouldn’t rather pay today’s price with today’s interest rate than count on a big discount and the wild card that interest rates might be very different,” Norris said.

“It would not shock me to have a 10 percent interest rate by the end of this negative cycle,” he said.

AP Business Writer Mark Jewell in Boston contributed to this story.

By Matt Woolsey, Forbes.com
June 11, 2007

When it comes to real estate, the questions on everyone’s lips are: How low is low, and when’s the perfect time to buy back in?

That moment has passed in Seattle and Charlotte–both metros hit bottom in the first quarter of 2006 and have since posted price gains of 12.3% and 6.3%, respectively, according to National Association of Realtors (NAR) data.

Ripe for investment? Philadelphia and New Orleans. Based on housing inventory and local economic conditions, both should hit price troughs by year’s end and bounce back with moderate gains around 4% in 2008.

 In markets expected to recover more slowly, such as Boston and Denver, low buyer confidence coupled with a surplus of housing stock has lengthened the slump. NAR chief economist Lawrence Yun points out that buyers are looking for clear signs of a market bottom and are content to wait on the sidelines until then.

It’s easy to see why. Most of the country’s real estate markets are feeling the effects of overproduction. A strong market hovers near a 1.5% vacancy rate, but the national average currently stands at 2.8% and in cities such as Miami, Atlanta and Denver, figures hang around 3.5%. In addition, every nugget of good news (a May Commerce Department report said that new-home sales are at a 14-year high) comes with bad news (median price growth is at a 10-year low).

So which other metro area markets stand the best chance of recovery, and when will that upturn occur?

Behind The Numbers
Market corrections follow three basic recovery patterns. A V-shaped recovery where a market experiences a sharp, fast decline but comes out strong once it hits bottom; a U-shaped recovery, where prices decline gradually and recover slowly; and an L-shaped curve, a hard, fast fall with paltry price bounceback following the market trough.

The differences between a V-shaped market and a U-shaped one has to do with barriers to growth. High vacancy rates and high investor share can hurt a market, but if the local economy remains strong and housing stock affordable it’s only a matter of how long it takes to absorb the excess inventory.

Tampa is a perfect candidate for a V-shaped recovery, according to research from Moody’s Economy.com, an economic analysis, forecasting and credit risk firm. The local economy remains strong, and subprime lending is relatively low. Tampa’s problem? A high investor share that lead to high vacancy rates. When the market turned sour in 2005, more than 25% of Tampa homes were owned as investment properties. Investors are quicker to flee during a downturn, thus creating a glut of available housing stock. In Tampa’s case, vacancy rates now stand at 3.5%.

“As investors exit, the market revives,” says Mark Zandi, chief economist at West Chester, Pa.-based research firm Moody’s Economy.com, as fewer speculative buyers results in a more stable market. “Tampa’s a pretty affordable market and first-time buyers can come in once prices fall.”

In the market for a seven-figure home? How much domain your dollar will net depends on where you look. Based on Moody’s Economy projections, Tampa should burn off its excess inventory and hit a price trough in the first quarter of 2008, at which point prices are expected to increase by 10.6% the following year.

These projections take into account housing affordability, vacancy rates, the strength of the local economy and job market, investor share in 2005 and the share of subprime mortgages. Data comes from Moody’s, the Bureau of Labor Statistics and the Federal Reserve’s Home Mortgage Disclosure Act.

Predicting the bottom of any asset market, especially real estate, is a difficult thing. While these projections are based on sound data and advanced modeling by Moody’s, no one can predict futures markets with absolute certainty.

Other Bounce Backs
Like Tampa, Phoenix is similarly afflicted by high investor share (26.1%) and it has a vacancy rate over 3%. Good affordability rates and a surging job market suggest that once Phoenix bottoms out, price growth will be strong. Moody’s projection model has Phoenix reaching its price trough in the fourth quarter of 2008 and then growing by 7.7% the following year.

Slower recovery rates are expected in markets such as Minneapolis and Boston, where a slumping local economy, slow job growth and negative migration numbers hamper long term prospects. Along with other U-shaped markets like Sacramento, that have double-digit subprime lending share, Zandi says it’s going to be harder for these markets to get going again.

That doesn’t necessarily mean V-shaped markets are in the clear. The labor markets in cities such as Las Vegas, Phoenix and San Diego, whose future economic success will be critical to recovery, are heavily in housing-related industries, according to Moody’s. So long as those economies can weather their respective corrections, they should be all right.

“These markets are going to experience more substantial declines in the coming year,” says Zandi. “Gauging the bottom is a very intrepid affair and the job market is very important to recovery.”

I’ve seen more and more houses come on the market that have MOLD. Buyers always want to know about the hazard. Knowing the problems and the disclosure laws are key if you are a Mold buyer. Having to enter a house with a mask for a showing should worry any buyer.  I thought I would a post a great resource for buyers that are considering buying a mold home. Here is an article that talks about getting rid of mold and preventing mold growth Mold Article. The article includes information from the US Environmental Protection Agency and the Centers for Disease Control and Prevention making it a great resource.

I viewed a segment on Lock bumping that I think everyone should know about. Lock bumping is when you can take a normal dead bolt lock put a key in it that has been cut in a certain way and tap on it with a hammer or screw driver and “Bam” the lock unlocks. Here is a video that goes into details.