Mortgage rates were trending down slightly as the month came to an end, according to the latest survey by Freddie Mac, the big secondary market institution which helps keep lenders awash with cash for home loans.
"A slowing housing market and signs that inflation is leveling off have helped to lower mortgage rates lately and keep them more affordable," said Frank Nothaft, vice president and chief economist for the McLean, Va.-based company. "Going forward, the economy is expected to expand at a somewhat slower rate than it did in the first half of the year. This should continue to keep inflation in check, and therefore, mortgage rates low."
The rate for 30-year, fixed loans averaged 6.4 percent, according to Freddie Mac's latest report. That's down 3/100ths of a percentage point from the previous week. A year ago at this time, however, the rate was 5.8 percent.
The 15-year fixed-rate loan was at 6.06 percent, down from 6.11 percent the week before but still a good bit above the 5.37 percent that was being charged just 12 months ago.
One-year adjustable rate mortgages tied to the Treasury index averaged 5.54 percent. That rate, too, was down from 5.6 percent the week before. Just one year ago, the rate on one-year ARMs was 4.48 percent.
Five-year Treasury-indexed hybrid ARMs averaged 6.08 percent, down only slightly from 6.1 percent the week before. A year ago, the five-year ARM averaged 5.31 percent.
In all cases except the one-year ARM, lenders were charging an average of 0.5 points on top of the quoted interest rate. On one-year ARMs, points averaged 0.8. (A point is 1 percent of the loan amount, and should be included when figuring the true cost of obtaining financing).
A New Wind's a' Blowin'
There's a new wind blowing, and it's not from a hurricane or tornado. It's from windmills.
According to the American Wind Energy Association, the country's wind energy installations now exceed 10,000 megawatts in generating capacity, and produce enough electricity on a typical day to power the equivalent of over 2.5 million homes. "Wind energy is providing new electricity supplies that work for our country's economy, environment, and energy security," said AWEA Executive Director Randall Swisher. "With its current performance, wind energy is demonstrating that it could rapidly become an important part of the nation's power portfolio."
The renewable energy industry is gaining momentum as it grows. The first commercial wind farms, for example, were constructed in California in the early 1980s, and after reaching 1,000 MW in 1985, it took more than a decade for wind to reach the 2,000-MW mark, in 1999. Since then, however, installed capacity has grown five-fold. Today, the industry is installing more wind power in a single year -- an estimated 3,000 MW expected this year -- than the amount operating in the entire country just six years ago -- 2,500 MW.
Don't Buy a Home Without It
American Express is piloting a program in which its card will be accepted as a downpayment for a new condominium.
Right now, the American Express card is being accepted at only one building, a luxury condo being built in the Moinian Group in New York City. The company was one of the first to accept the card for rental payments across its luxury rental portfolio when AmEx announced in 2003 that cardholders could us their cards to pay their rent. The new downpayment program is based on that endeavor.
"Our card members around the country have embraced the benefits of monthly rental payments on the card," said Kyle Curtin, vice president of Strategy and Business Development. "Downpayments on the card bring the convenience and rewards to an extremely new level."
Under the pilot, buyers must charge the entire downpayment, and are expected to pay the full balance owed on their cards when their bills arrive the following month. According to AmEx, it is in active discussions with developers of high-end condos in other cities to offer a similar program.
Lead Paint Cleanup
The Department of Housing and Urban Development is making available $39 million in funding to clean up dangerous lead-based paint hazards in communities with the greatest need, specifically cities with the highest incidence of lead poisoning and the greatest amount of older rental housing. HUD's Lead Hazard Reduction Demonstration Grant Program is designed to assist local urban areas to identify and control lead-based paint hazards in eligible privately owned housing.
"This funding will find its way into communities with the greatest risks to our children," said HUD Secretary Alphonso Jackson. "This is an entirely preventable disease and through grant programs like this, we hope to protect future generations of children from the tragedy of lead poisoning."
The new program supports HUD's goal of eliminating childhood lead poisoning in children and producing lead-safe housing in low-income areas. HUD says it will now be aggressively promoting this grant opportunity to mayors and county officials of every eligible jurisdiction across the country.
‘Youngster's Drive Housing Market
Young adults are more likely to buy a home at a younger age than their older brothers and sisters as well as their baby boomer parents, according to research from the National Association of Realtors. They aren't even waiting for marriage or even a long-term relationship before becoming homeowners.
"The next generation of home owners is beginning to exert its influence on the housing market," said NAR President Thomas M. Stevens. "Many younger buyers have seen the wealth-building effects of homeownership in their parents and understand the value of housing as a good long-term investment."
The percentage of first-time homebuyers under age 25 has been increasing in response to historically low interest rates and continued confidence in the long-term housing market, from 11 percent in 2001 to 14 percent in 2005, according to the 2005 NAR Profile of Home Buyers and Sellers.
"Owning a home is no more burdensome than renting, and in the long term, it's the better investment," said Kristen Carreira, a 26-year-old homeowner in Pittsburgh who also is part of another trend, that of single female home buyers.
While married couples are still the norm, they represent a smaller share of the home buying public than they did just 10 years ago, from 70 percent of home buyers in 1995 to 61 percent today, says NAR. During that same time, the proportion of single women buying homes has increased, from 14 percent in 1995 to 21 percent today.
