Mortgage Rates
Up or down? Depending on who you ask, mortgage rates were either up a bit as August drew to a close or they dropped a tad.
According to Freddie Mac, the big mortgage finance company which buys loans from local lenders, the average rate for a 30-year fixed-payment loan was 6.52 percent, down a tenth of a percent from 6.62 percent the previous week. A year ago, the 30-year fixed loan averaged 6.48 percent, so things really haven't changed much.
But the Mortgage Bankers Association reported that rates went up a little as the month was ending, with the average cost of a fixed loan increasing from 6.45 percent to 6.49 percent. (The MBA draws its numbers from weekly survey of lenders who originate about half of all home loans. But it also includes origination fees -- also known as points -- which Freddie Mac's figures do not.)
Whatever the case, home buyers can expect rates to trend down somewhat over the next few weeks, thanks largely to the Federal Reserve Board's decision to cut the discount rate by half a percent to 5.75 percent.
Here's a snapshot of other key lending rates at the end of August:
- The average rate for 15-year fixed loans was down substantially, from 6.3 percent to 6.18 percent, the same rate as a year ago, according to the Freddie Mac.
- One-year Treasury-indexed adjustable rate mortgage were down from 5.67 percent to 5.6 percent, again the same point as the were 12 months earlier.
- Five-year Treasury-based hybrid adjustables averaged 6.34 percent, down just a tick from 6.35 percent. A year ago, the rate of these loans was somewhat lower at 6.14 percent.
As always, commitment rates should be considered along with average fees and points to reflect the total cost of obtaining a loan.
Move Over, Batman
Women make all the home buying decisions, but home builders aren't ignoring what they hope is the future man of the house. Some are finding success in marketing a "man cave" as a place guys can call all their own.
Traditionally, men have been shoved down into the basement along with their sports paraphernalia and ratty old recliners. But increasingly, men are devoting more time and resources to make their underground caves more comfortable and upscale.
Charter Homes & Neighborhoods, Central Pennsylvania's largest independent homebuilder, has received such a strong demand that it has incorporated a more upscale, above-ground version of the man cave into all its new home designs. Charter's version comes complete with all the game-day necessities, including a mini kitchen with a refrigerator for snacks, a full bar with a "kegerator," a place for the plasma TV, a dart board and a poker table.
Along these same lines, Home Depot has launched a new paint line called Team Colors, which allows fans to purchase paint that is the exact replica of their favorite team's colors. Home Depot has also reported an increase in sales of large storage sheds that were purchased for "entertainment" purposes.
In addition, the Home Theater Specialists of America, a national association of over 60 high-end home entertainment and custom in-home theater dealers nationwide, say flat screens and plasma TVs for man caves are a hot ticket this year.
The Fix-ed Is On
Fewer borrowers opted for fixed-rate loans when they refinanced in the second quarter. But the vast majority still went with the safety of set payments, despite slightly higher rates.
According to Freddie Mac, 85 percent of borrowers who originally had a 1-year adjustable-rate mortgage (ARM) chose a new fixed-rate mortgage when they refinanced and 86 percent of those who initially had a hybrid ARM refinanced into a fixed-rate loan as well. The comparable numbers in the first quarter were 89 percent and 88 percent, respectively.
The rest of the ARM borrowers who traded in their old mortgages in the second quarter went for another ARM, mostly because the spread between fixed and adjustable rates was somewhat more attractive than it had been.
"With the recent contractions in mortgage lending standards and increasing emphasis on underwriting borrowers to fully indexed rates on adjustable-rate mortgages, it is likely that we will see more demand for fixed-rate products for both new home purchases and refinance in the future," said Fannie Mae economist Amy Crews Cutts.
A Lot for a Little
We all can't rush out and drop $5,000 on new furniture whenever we feel its time for a new look in our home. But there are things we can do to create new looks and freshen existing ones that won't force a cancellation of a family vacation or put a dent in junior's college fund. You'll need to be a little flexible and creative to pull off some of these ideas and make them work. But hey, no pain, no gain, right?
The idea is to think small, not big. Or at least think less big. Instead of a new sofa, for example, settle for a chair or two. If you want a new coffee table, consider new side or end tables. You can still make an impact with furniture by choosing less expensive pieces to accompany your existing main pieces.
If your sofa is battered and tattered and pretty much a repulsive eyesore, fear not, there may still be hope for it. This savior of the sofa is, of course, the slip cover. Slip covers have been vastly improved over the last few years to fit better and to look more natural. You may have to get one specially made if your sofa is an odd size, but this is still a cheaper way to go and it frees up money to be spent elsewhere.
Another option for making a big impact for little dough is looking into a new area rug. If you currently have wall-to-wall carpeting, tile or wood, a rug is a great way to break up that monotony. The right area rug can also pull colors out of your furniture and fixtures, changing the dynamic of a room drastically.
If you have a standard rectangular coffee table, look into a round or oval rug to add some different lines to your room. Straight lines and sharp edges abound in most rooms, so throwing in a few curves is a great way to add a new dimension and add a little character at the same time.
