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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (5519)	9/22/2002 8:11:57 AM
From: nextrade!	Read Replies (1) \| Respond to of 306849

"It's getting darn hard to make any money in mortgages," delinquencies and foreclosures ? usatoday.com Mortgage rates fall to lows last seen in '60s By Thomas A. Fogarty, USA TODAY Mortgage rates this week took their steepest tumble since July, renewing the question: Just how far can they fall? Investment giant Freddie Mac reported Thursday the rate for the benchmark 30-year mortgage is 6.05%, down 0.13 percentage points from a week ago. It's the sixth time in the past nine weeks that rates have set or tied a record low in the 31-year-old Freddie Mac survey. The 5.59% average rate for 15-year mortgages is a record low, too. Economists say rates this low were last seen in the early 1960s. Monthly savings The average 30-year mortgage rate this week of 6.05% compares with a high this year of 7.18%, reached March 28. Here's how monthly payments{+1} would differ on $200,000 mortgages initiated at the high and low points this year March 28 $1,355 Now $1,206 Difference $149 1-Principal and interest; Source: USA TODAY research "I don't think it's the floor," says James Nutter Jr., CEO of James B. Nutter Mortgage in Kansas City, Mo. Nutter says he's looking for the 30-year rate to slip to about 5.6%, and the 15-year rate to drop a hair below 5%. He says the stock market has further to fall despite a sell-off that left the Dow closing Thursday below 8000. Investors abandoning stocks will pump more capital into the bond market, Nutter says, and that pushes down mortgage rates. So should fence-sitters wait for lower rates? "It depends on how much of a gambler you are," Nutter says, adding that he'd refinance now. In addition to the tumbling stock market, says Freddie Mac chief economist Frank Nothaft, mortgage rates are responding to the possibility of war in Iraq. Economic and political uncertainty drive investors into the security of the bond market, where much of the capital for home financing originates. On Thursday, bond investors drove down the yield on the 10-year note, a benchmark in mortgage pricing, to an ultralow 3.78%. Keith Gumbinger, at rate-tracker HSH Associates, says the astounding fall in rates has him rethinking the factors that could ultimately drive them higher. Most analysts have been saying that a strong rebound in the economy could cause rates to begin creeping upward. Because such a rebound is nowhere in sight, Gumbinger sees another possibility. The big investors who provide capital for home financing by buying mortgage-backed securities might begin to see them as bad investments. Already, the flood of refinancing has returned to investors more cash than they want as old mortgages are retired. Also, Gumbinger says, risk is on the rise because of delinquencies and foreclosures. Returns to investors are already low, and at some point the risk of investing in home mortgages may not be worth it. "It's getting darn hard to make any money in mortgages," Gumbinger says. Meanwhile, investors are making the most of low rates. The Mortgage Bankers Association reported this week that the volume of refinancing over the past eight weeks is the largest ever, surpassing the post-Sept. 11 surge last year. Refinancing represented 74% of mortgage applications last year, the MBA said.

To: nextrade! who wrote (5519)	9/22/2002 6:27:26 PM
From: GraceZ	Read Replies (2) \| Respond to of 306849

Yup, this is going on where I live. The thing that really got to me is about two years ago a group of homeowners just north of me whose new development was placed right next to a Dairy farm (that had been there over 100 years) got together to complain about the smell and the farm equipment. It makes me crazy. You don't move next to a farm and then complain about it being there. The falling prices that farmers can get for their wares is also driving them out. When you are losing money every single year and some developer comes along and offers you more money than you've ever seen.....its hard to hang onto the farm. I know my neighbor used to go out and hay a bunch of fields for feed for his cows and now he has to buy hay because they no longer exist. We do have an agricultural preserve that the farmers can get some money from if they promise to keep the land as farmland, but its no where near as much money as they get from the developers. When I get together with my neighbors, a lot of the talk is about how many houses "they" want to put on such and such property. About ten miles down the interstate towards the city, in the heart of horse country, where many of the wealthy decided to build their country estates, a group of the local big wigs pooled resources and bought up all the existing farms (most of which were owned by one family) so that they could keep them from being developed. They put deed restrictions on the land or sold into the preserve so that some developer couldn't put in a big tract of low rent (under a million) houses next to their chateau. They don't seem to mind beaten down barns and old farm houses, but don't put any Ryland Homes in there....or heaven forbid, townhouses. Of course this has had the effect of pushing the developers further north to my neighborhood. The only thing that saves me is that we are a major watershed. All the drinking water for the region originates here so there is a vested interest in having the area remain under developed and rural.