Up again. Not by much, but mortgage rates moved up again this month and are heading towards the 7 percent mark.
Will the rise end there or keep bumping up? That's the question of the day. Frank Nothaft, chief economist at mortgage giant Freddie Mac, thinks it might just hold at the current level, at least for a while. He says the financial markets are breathing a bit easier since new Fed Chairman Bernanke "hinted that another rise in overnight lending rates might not be imminent" during his semi-annual visit to Congress.
For now, the rate for 30-year fixed-rate loans stands at an average of 6.8 percent nationally, according to the latest survey by Freddie Mac, which supplies local lenders with money for home loans. That's an increase of 6 basis points (a basis point is 1/100th of 1 percent) from the week earlier.
The last time the rate for fixed loans was this high was more than four years ago, when the average was 6.81 percent for the week ending May 24, 2002. Last year at this time, the average was more than one full percentage point lower, at 5.73 percent.
On a $200,000 mortgage, the difference in principal and interest payments between 5.73 percent and 6.8 percent is $159 a month.
For 15-year fixed-rate loans, the average at the end of July was 6.41 percent, up from 6.37 percent the prior week. A year ago, the average was 5.32 percent, according to the Freddie Mac survey.
One-year adjustable rate mortgages were priced at 5.8 percent, up from 5.75 percent the week before, and five-year ARMs averaged 6.36 percent, an increase from 6.33 percent. A year ago, the average for these loans was 4.42 percent and 5.26 percent, respectively.
By the way, be sure to add roughly 50 basis points to each of these rates in origination fees (also known as points) to reflect the true cost of obtaining a new mortgage.
New Home or Big Wedding?
With the average wedding approaching $30,000, many newlyweds are opting for a lifetime of entertaining guests in their own home over a few hours with 200 friends in a rented ballroom.
A recent national survey by national home builder KB Home found that 92 percent of American adults say that if they were about to get married and were also in the market for a new home, they would rather use the money towards a home versus spending it on a dream wedding.
"I think that most couples today know that marriage is not about one perfect day, but a lifetime of making dreams come true. That's why so many of them are choosing to put their hard-earned money into something that will provide a foundation for their entire lifetime together," said KB Home senior vice president of sales and marketing, Wendy Marlett.
If you are in the wedding or house quandary, here's an idea: Why not hold the big event in your new homes after you and your spouse move in. In other words, make the new digs a part of the celebration. Maybe you'll get house-warming gifts as well as wedding presents.
Appraisal Worth a Read
It's yours (by federal law), you paid for it, and it's worth reading and saving for future reference. We're talking about the appraisal that was made of your house just before you bought it.
Appraisals are opinions of value. Residential real estate appraisals compare your home to similar homes that have sold to come up with an opinion of value. A residential appraisal gives summarized and concise information about your house, but it is not the same as a home inspection.
The appraiser's report includes important details about the house, side-by-side comparisons of similar properties, an evaluation of the real estate market in the area, notations concerning major problems with the property that impact its value, an estimate of the expected time it will take to sell it, and descriptions of the area and more immediate neighborhood.
Before you think about selling, the American Society of Appraisers suggests that you review your appraisal report, paying particular attention to items that resulted in a negative adjustment. Use it as a roadmap to find places you might want to consider updating or remodeling. For example, having less than the typical number of baths for houses of a similar size could force you to accept a lower price. Similarly, if your kitchen is outdated, you might not be able to ask as much as you could if it were modernized.
ASA also suggests getting your house appraised before you put it on the market. That will help you price it and help ensure that the house will appraise for your asking price when the eventual buyer goes to obtain financing. Many sellers are shocked when their house appraises below the asking price and, either their deal falls through, or they have to reduce their asking price.
We're Happy With Our Neighborhoods
Americans are extremely satisfied with their neighborhoods, according to data from the 2005 American Housing Survey.
On a scale of one to ten, with ten being the best, 70 percent of the households queried rates their neighborhoods an eight or above, the Census Bureau reported recently. That's about 1 percentage point higher than they did in 2003, the last time similar data was collected. Houses in the Midwest had the highest rating among the regions.
The median home value rose from $140,201 in 2003 to $165,344 in 2005. But the median value of a brand-spanking new place - one built within the previous four-years -- rose even more dramatically, from $186,939 to $236,864.
Grandparents Day: Sept. 10
Grandparents Day was the brainchild of Marian McQuade of Fayette County, West Virginia, who hoped that such an observance might persuade grandchildren to tap the wisdom and heritage of their grandparents. The first presidential proclamation was issued in 1978, and one has been issued each year since, designating the first Sunday after Labor Day as National Grandparents Day. This year, it's Sept. 10.
There are about 56 million grandparents in the United States, and 5.7 million of them have grandkids living under their roofs. Some 2.4 million grandmas and grandads are responsible for the most basic needs -- food, shelter, clothing -- of at least one grandchild. All told, 6.1 million grandkids live with a grandparent. That's an amazing 8 percent -- one in 12 -- of all the children in the U.S.
