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Mortgage Interest Rates Jump to Highest Level Since August April 8, 2010

Posted by admin1 in Real Estate.
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Source: Washington Post

Author: Elizabeth Razzi

URL: http://voices.washingtonpost.com/local-address/2010/04/jumping_mortgage_rates_and_ope.html

Mortgage interest rates jumped this week to the highest level since August, Freddie Mac economists report today. Thirty-year fixed rates hit an average of 5.21 percent — which is up from last week’s 5.08 percent — and a half a percentage point above the record low recorded in early December. Thirty-year loans also charged 0.6 point in prepaid interest, on average. One point equals 1 percent of the loan amount.

Freddie Mac economists chalk it up to a couple of positive economic reports posted recently, including better employment numbers and a surprise 8.2 percent jump in pending existing-home sales logged in February. They didn’t mention it, but retail sales also showed gains — and the Fed’s extraordinary program designed to drive down rates by buying mortgage-backed securities issued by Fannie Mae and Freddie Mac expired at the end of March, both of which could have helped boost mortgage rates.

Perversely, rising interest rates tend to boost home sales — at least in the short term. Buyers who had been sitting on the fence often get jolted into action when they see rising rates eat into their new-home budget. Combine that with a major nationwide marketing push by Realtors to hold open houses on as many of their listings as possible over the April 10-11 weekend, and the market could get pretty interesting over the next week or so.

The Realtors are doing this open house push as we enter the final three weeks of the government’s tax credit program for home buyers. Buyers need to be under contract by April 30 to qualify for the $8,000 first-timer tax credit or the $6,500 credit available to some repeat buyers.

Do you think the open house extravaganza is a good idea — something that should be repeated more often? Or are you getting all the info you need from online photos? Share your thoughts in the comments!

Talks of Real Estate Development at Ground Zero April 3, 2010

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Source: NY Times Editorial

URL: http://www.nytimes.com/2010/04/03/opinion/03sat4.html

“A Deal at Ground Zero?”

Mayor Michael Bloomberg and other politicians are celebrating a deal to finally finish the major buildings at the World Trade Center site. Let’s hope they are right to break out the confetti. Larry Silverstein, who is developing office towers on the site, and the Port Authority of New York and New Jersey, which owns the 16 acres, need to make sure that the agreement does not fall apart yet again, as they fill in the remaining details.

No one should be surprised to hear that the latest stalemate — which has dragged on for more than a year — was about money. Mr. Silverstein has been insisting that the Port Authority use scarce public funds to help finance his three private office towers. The authority has rightly balked, citing more basic needs like tunnels and bridges and ports. Last week, both sides agreed in principle to go ahead with two skyscrapers, and Mr. Silverstein will pick up more of the bill than he wanted.

The Port Authority has pledged to provide $1.2 billion in financing to complete the first tower, which would cost an estimated $1.75 billion. For that tower and the second one, expected to cost almost $2 billion, Mr. Silverstein would commit to using what is left of the huge insurance payout he got after the attack and from tax-free Liberty Bonds. He has also committed to raising $300 million and finding renters for 400,000 square feet (16 percent) of the office space in the second tower before the city, state and authority provide $600 million more in financing.

Plans for the third tower will be wisely kept on hold, the area preferably turned into a park, until the downtown real estate market is ready for more offices.

The details still to be worked out include questions about development fees for Mr. Silverstein and the interest rate for the authority’s financing. The two sides need to settle those and get things moving. The 10-year anniversary of the attacks is 17 months away. With good faith and a serious effort, the memorial to the victims of Sept. 11, the site’s centerpiece, can be ready by then.