A blog sign-off
Alas, good things come to an end. And for me, at least, the Local Address blog was a good experience, allowing a beneficial give-and-take with the Washington Post's profoundly knowledgeable audience. Although this blog is being discontinued, I will continue to edit the Saturday Real Estate section, much of which appears online on Fridays. And I will be writing some stories as well. My e-mail box remains open for business. You can find me there at firstname.lastname@example.org.
Thanks so much for your contributions to this blog, and for the time you've spent here. It has been a pleasure.
The Weekend Poll: Yea or nay on housing tax breaks?
Owner-occupied housing carries significant tax breaks. There's the mortgage interest deduction plus the ability to shelter up to half a million dollars in home-sale profit from capital gains tax. Is it too much? Just right? Not enough?
July 16, 2010; 10:00 AM ET |
Categories: Poll , Taxes , The economy , Weekend Poll | Tags: capital gains tax, housing tax breaks, mortgage interest deduction
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The Weekend Poll: Who cares about buses and trains?
When you're choosing a new address, how important is it that bus and rail lines serve the neighborhood?
No chat today!
I apologize for the late notice, but we won't be having our regularly scheduled Real Estate Live chat today. I was rarin' to go, but outside forces intervened. Let's blame it on LeBron James. Or BP. Or Lindsay Lohan's manicurist.
The chat will be back as scheduled July 23. Thanks for your patience, and have a fantastic weekend. -- Elizabeth
Third week of record lows for mortgage rates
Interest rates on 30-year fixed-rate mortgages averaged 4.57 percent this week, Freddie Mac reported this morning. That's down just a hundredth of a percentage point from last week's average rate, but it marks the third consecutive week of record-setting lows for the most popular type of home loan. Freddie Mac has been tracking this rate for 39 years.
The 5/1 hybrid loans that are fixed for five years and then convert to an annual rate-adjustment schedule also hit a new low, 3.75 percent. Freddie started tracking that series in 2005.
Mortgages fixed for 15 years rose to 4.07 percent from last week's 4.04 percent. One-year adjustable-rate mortgages pegged to the Treasury index averaged 3.75 percent this week, down from last week's 3.8 percent.
The amount of up-front interest, called points, has remained steady for many weeks, averaging 0.7 point for each type of mortgage. One point equals 1 percent of the loan amount, and a loan with higher points typically carries a lower interest rate.
The Weekend Poll: Who has it made in the shade?
It used to be assumed that a vacation-home owner was in a better position than vacation renters. Given the price declines of recent years, that's not necessarily so. Who fares better now?
This is a non-scientific user poll. Results are not statistically valid and cannot be assumed to reflect the views of Washington Post users as a group or the general population.
30-year mortgage rates hit another low
How low can they go? Freddie Mac reported this morning that average rates on a 30-year fixed mortgage sank to 4.58 percent, blowing past last week's record low of 4.69 percent by 11 basis points.
Rates on 15-year fixed loans hit a new record, 4.04 percent. Rates on 5/1 hybrids fell to a new record of 3.79, virtually equal to the average rate on a 1-year ARM at 3.8 percent. Only the 1-year ARM failed to set a record this week.
Freddie Mac chief economist Frank Nothaft said in a press release that we're in "a period when the economy struggles to gain momentum and inflation remains very low."
Our little Weekend Poll is unscientific and statistically insignificant. But with that grain of salt duly noted, it's interesting to check your responses to the June 25 poll, which asked how long mortgage rates would remain low. Here's the breakdown:
37 percent: Rates will go even lower.
35 percent: Rates will stay low through the rest of the year.
17 percent: Rates won't stay low for long; inflation is coming back.
10 percent: Rates will stay low well into next year.
Meanwhile, news just out from the National Association of Realtors is hardly encouraging. Pending home sales, based on homes going under contract in May, fell 30 percent from April and were 15.9 percent below a year ago.
Of course May was the first month without the federal home-buyer tax credit. And the month got off to an unsettling start with the Flash Crash on Wall Street. Even though a prospective home buyer's down payment money should never be tied up in the stock market, Wall Street drama doesn't exactly prompt people to declare, "Honey, let's buy a house!"
What do you think is going on? Are other factors more important than low mortgage rates now? And how long might the post-tax-credit funk last in the housing market?
Closing deadline will be extended to Sept. 30
Both houses of Congress have now passed an extension to Sept. 30 of the closing deadline to qualify for the homebuyer tax credit, the Post's Lori Montgomery reports. The measure will go to President Obama for his signature.
Only buyers who already met the April 30 deadline for going under contract on a home purchase will be affected by the extension of the closing deadline.
House acts on tax credit deadline but June 30 still stands
There was some movement on Capitol Hill Tuesday toward extending the homebuyer tax credit. Here's what the Post's Dina ElBoghdady reports:
The House voted Tuesday to give home buyers who want to take advantage of a lucrative federal tax credit three extra months to complete their home purchase.
The measure, which passed 409 to 5, is now headed to the Senate. But its chances of survival in that chamber are unclear, according to a statement from the National Association of Realtors.
The tax credit — $8,000 for certain first-time buyers and $6,500 for some repeat buyers — was available to people who had signed a contract by April 30 and closed on it by June 30. The House bill would extend the closing deadline to Sept. 30. A similar proposal died in the Senate earlier this month because it was attached to a broader, more controversial bill that failed.
The Realtors’ association estimates that up to 180,000 people who signed contracts by April 30 would not be able to meet the current closing deadline because of mortgage processing delays.
Tick, tock ... tax credit deadline looms
How's it going out there, racing to close home purchases by 11:59 p.m. Wednesday?
That remains the deadline to qualify for the homebuyer's tax credit of up to $8,000. A measure extending the closing deadline to Sept. 30 is pending in Congress -- but it has not been passed. (That would apply only to deals that met the April 30 deadline for going under contract.)
There is always a chance that Congress could pass an extension after the June 30 deadline that could be made effective retroactively, but that can't be counted on.