The Dow was up 391 points yesterday as Wall Street is optimistic that the worst of credit crisis is behind us and that the economy is faring better than expected. With all of the money rushing into stocks, treasury yields rose on the 10 year note 13 basis points, causing rates on 30 year fixed rate mortgages to go up by 1/8 to 1/4 of a percent.
In other news...
1.New home construction fell nationally for the 24th straight month
2.National City, Ohio's biggest bank, may sell itself as it faces the prospect of more losses from subprime loans.
3. MN received a $4.3 million federal grant that could help prevent up to 7,000 foreclosures across the state. Some of that money will be used to hire additional foreclosure counselors to help homeowners work with their lenders.
4. A MN real estate investment company, TJ Waconia, is being sued by North Minneapolis communities for fradulent dealings in their communities leading to a high number of foreclsoed properties.
Jim Steel
Fairway Residential Lending/IBR Realty
jsteel@frlcorp.com
Wednesday, April 2, 2008
Tuesday, April 1, 2008
MN Real Estate Spring Market Update
Spring is here and I would like to take the opportunity to give everyone an update on the mortgage and Real Estate industry in MN.
Long-term mortgage rates remain very low and the Federal Reserve has been lowering short-term rates. The Prime-lending rate is currently at 5.25%. Now is a great time to "Fix Your ARM" and lock in to a low fixed rate. With a combination of the new MN lending laws and the credit crunch the economy is experiencing, it is becoming more difficult for people to borrow money. However, there are still many great loan programs out there and the government is trying to get people to buy more homes. For example, the new FHA loan limit in the Twin Cities Metro Area is $365k, which is about $90k higher than the old limit. By raising this limit the government is willing to insure more home mortgages as they are trying to get lenders to start borrowing money again. Now is a fantastic time to purchase a home.
With all of the tightening is the mortgage industry, inventory of homes on the market remains very high. The number of new listings is down but the number of homes selling each month is down as well. The number of foreclosures keeps growing and you see more and more bank owned or short sale properties on the market all the time. Because of this, the Twin Cities Metro Area and some additional counties throughout MN are considered to be in a "declining market." While the news seems glum, Real Estate is cyclical and values will go up once again. Homeownership is the staple to building wealth.
Long-term mortgage rates remain very low and the Federal Reserve has been lowering short-term rates. The Prime-lending rate is currently at 5.25%. Now is a great time to "Fix Your ARM" and lock in to a low fixed rate. With a combination of the new MN lending laws and the credit crunch the economy is experiencing, it is becoming more difficult for people to borrow money. However, there are still many great loan programs out there and the government is trying to get people to buy more homes. For example, the new FHA loan limit in the Twin Cities Metro Area is $365k, which is about $90k higher than the old limit. By raising this limit the government is willing to insure more home mortgages as they are trying to get lenders to start borrowing money again. Now is a fantastic time to purchase a home.
With all of the tightening is the mortgage industry, inventory of homes on the market remains very high. The number of new listings is down but the number of homes selling each month is down as well. The number of foreclosures keeps growing and you see more and more bank owned or short sale properties on the market all the time. Because of this, the Twin Cities Metro Area and some additional counties throughout MN are considered to be in a "declining market." While the news seems glum, Real Estate is cyclical and values will go up once again. Homeownership is the staple to building wealth.
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