Mortgage Rates
Mortgage rates were moving slightly higher as September was drawing to a close - despite an unexpectedly generous half-percent cut in the Fed funds rates by the Federal Reserve Board.
It's not that the cut wasn't important. It was, as evidenced by an almost immediate drop in short-term lending rates. But it will take some time before the move extends into longer term rates such as that charged on mortgages.
Even at that, though, it may not be enough to bring would-be buyers back off the sidelines. But it will almost certainly benefit nervous home owners sitting on risky mortgages that are about to reset. Any drop in rates for those folks, long or short-term, would be welcome news because it means they better be able to afford whatever adjustment may be coming their way.
Indeed, according to the Mortgage Bankers Association, the rate cut brought a flurry of new loan applications, but most of them were from current borrowers who were looking to trade in their current mortgages for new ones.
According to mortgage market giant Freddie Mac, the rate on a 30-year fixed mortgage averaged 6.34 percent as September -- and summer -- was ending. That's up from 6.31 percent the previous week but down from 6.4 percent a year ago. Also, lenders were charging 0.5 points as an origination fee.
(A point is 1 percent of the loan amount. Points and other fees and charges should always be included to determine the total cost of the mortgage.)
Freddie Mac also reported that a 15-year fixed-rate mortgage averaged 5.98 percent plus 0.5 points, up just a tic from the prior week when it averaged 5.97 percent. A year ago, the average rate on a 15-year fixed loan was 6.06 percent.
The typical one-year Treasury-indexed adjustable rate mortgage averaged 5.65 percent plus 0.6 points, down slightly from the week before, when the average was 5.66 percent. At this time last year, the 1-year ARM averaged 5.54 percent.
Finally, five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.21 percent, typically a 0.5 point origination fee. That's up from the previous week's average of 6.17 percent. A year ago, the 5-year ARM averaged 6.08 percent.
Fix It Made Easy
A broken appliance can be stressful, but finding the right part to fix it doesn't have to be, thanks to APWagner.com.
Based in Depaw, N.Y., APWagner.com is a leader in the distribution of appliance parts and accessories. The 80-year-old firm services appliance dealers, service technicians and do-it-yourselfers
Recently, the site has started a live, online chat section so users can find what they are looking for on the first visit. "In our fast paced, technological world, people want options. They need help and they need it fast," said President Mike Mangan. "Our parts professionals are some of the best in the business and will be able to help everyone with their hard to find parts!"
The company has an inventory of more than four million pieces, and parts pros are available from 8 a.m. to midnight, seven days a week. The website also offers detailed descriptions and photographs of many products, image schematics and repair and maintenance tips for all types of major appliances.
Tax Gap
Are you -- or more directly, the contractors you use to repair your roof, mow the lawn or paint your rooms -- contributing to the tax gap?
The tax gap is the difference between the amount of taxes that should be paid and the amount actually paid voluntarily and on time. If you pay these people and others in cash, you may be unwittingly contributing to that nation's budget deficit, because many of these folks either under-report their incomes to the IRS or do not report their incomes at all.
FYI, according to Uncle Sam, contractors, subcontractors, and workers must pay taxes on income received for work, including side jobs and work that is paid for with cash. This includes work in exchange for credit on a bill. It also includes work that is done in exchange for goods or services in a barter exchange.
Taxpayers aren't required to report what they pay contractors, at least not yet. But it might one day come to pass that everyone of us will have to give an IRS Form 1099 to each and every person who works in and around our houses. That means checking their Ids, getting their social security numbers and their correct addresses. Not looking forward to that.
Fire Sprinkler Update
New research has found that while residential fire sprinklers may bring down the cost of home owners insurance, the savings won't be nearly enough to pay the cost of installing the sprinklers in the first place.
The study was conducted by the NAHB Research Foundation, an independent arm of the powerful National Association of Home Builders, which has steadfastly maintained that home sprinklers don't save nearly as many lives as smoke detectors and are not worth the extra expense.
Manufacturers, on the other hand, point to the fact that most insurers give home owners a break on their premiums if they have sprinklers.
The survey of 102 builders who built more than 5,500 houses with sprinklers in 2006 found that the average cost of the systems was $5,573, including redesign, extra permits, tap fees and inspection fees. Advocacy groups have been saying that the cost would range from $2,465 to $3,698.
Include other costs -- financing, fees and profits -- and the cost is probably closer to $6,677, the Research Center said. At an interest rate of 6.7 percent for a 30-year mortgage, the overall cost of sprinklers would add $552 a year to the annual loan payments. And that's much more than the insurance savings.
Climate Change
Meeting the growing demand for conveniently located homes in walkable neighborhoods could significantly reduce the growth in the number of miles Americans drive, shrinking the nation's carbon footprint while giving people more housing choices, according to a team of leading urban planning researchers.
In a comprehensive review of dozens of studies published by the Urban Land Institute, the researchers conclude that urban development is both a key contributor to climate change and an essential factor in combating it.
They warn that if sprawling development continues to fuel growth in driving, the projected 59 percent increase in the total miles driven between 2005 and 2030 will overwhelm expected gains from vehicle efficiency and low-carbon fuels. Even with projected efficiency improvements, vehicle emissions of carbon dioxide would be 41 percent above today's levels, rather than well below 1990 levels as required for climate stabilization by 2050, according to the forthcoming book, Growing Cooler: The Evidence on Urban Development and Climate Change.
"Curbing emissions from cars depends on a three-legged stool: improved vehicle efficiency, cleaner fuels, and a reduction in driving," said lead author Reid Ewing, research professor at the National Center for Smart Growth, University of Maryland. "The research shows that one of the best ways to reduce vehicle travel is to build places where people can accomplish more with less driving."
