Cities all over the country are fighting the growth of giant homes. In 1973, the median size of a new American home was 1,525 square feet; in 2006, it was 2,248 square feet.
Cities like Minneapolis and Atlantic Beach, Fla., have passed laws restricting home size to half the square footage of its lot. Boulder County, Colo., is considering forcing people in some rural areas to pay extra to build homes bigger than 3,000 square feet.
The unprecedented explosion in homes in the last five years "has produced so much change on the landscape that this is really a counter-response to it," says James W. Hughes, dean of Rutgers University's Bloustein School of Planning and Public Policy.
Opponents to these kinds of laws say they infringe on property rights. Bellevue, Wash., has tried to circumvent this issue while still protecting owners of small, older homes from view-blocking McMonsters by requiring preservation of trees and limiting height above grade.
"Change occurs," says Cheryl Kuhn, Bellevue’s neighborhood outreach manager. “But you want that to happen in a graceful way."
Source: The Los Angeles Times, Nicholas Riccardi (07/23/07
Tuesday, July 24, 2007
Friday, July 20, 2007
6 Ways to Quickly Boost Credit Scores
As lenders tighten their underwriting guidelines, borrowers are wise to raise their credit scores to qualify for loans, secure better loan terms, and receive lower interest rates.
"Individuals can positively affect their credit scores in as little as three weeks," says Edward Jamison, a Los Angeles-based credit attorney. "It's just a matter of getting educated and focused on the best, fastest, and most reliable course of action."
Jamison, who you may know as a credit expert on the NBC show, “Starting Over,” offers these six tips for improving credit strength quickly.
1. Know your limits. Borrowers should first check their credit limits and evenly distribute the balances they're carrying to help increase their credit scores, or better yet, pay them off in full to get the highest score increase. "Make sure your maximum limit is reported," Jamison says. "When no limit is reported, credit scoring software presumes the account is maxed out."
2. Bring the balances near zero. The credit scoring software scores more favorably to those with a closer balance to zero. Balances over 70 percent damage credit the most, followed by the next tier of 50 percent and then 30 percent of the maximum credit limit. "Rather than carrying a large balance in an unfavorable tier, redistribute outstanding balances over several credit cards," advises Jamison.
3. Don’t cancel your cards. "Closing credit card accounts can hurt your score unless the accounts were opened less than two years ago, and you have over six credit cards," Jamison says. Fair Isaac's credit scoring software assumes that people who have had credit for a longer time are at less risk of defaulting on payments.
4. Eliminate late payments (but ask nice). Get rid of late payments listed on the credit report. "Contact the creditors that report late payments and request a good faith adjustment that removes the late payments reported on your account," Jamison says. The creditor may work with you, but it may require more than one phone call; patience is required. Your odds of success will dwindle if you're rude or unclear about your request, he adds.
5. Get rid of collection accounts. But only if the collection agency agrees to delete them in return. Paying them off can otherwise actually lead to a decreased credit score due to the date of last activity getting updated to the current date when you pay. The consumer should contact the collector and request a letter explicitly stating the agreement to delete the account upon receipt or clearance of the payment, Jamison says. Not all collection agencies will delete reporting, but it's certainly worth the effort.
6. Pay off past due amounts on accounts that are not in charge-off status. After that, Jamison advises getting rid of charge-offs and liens that are less than two years old. "Charge-offs and liens that are older than 24 months do not affect your credit score nearly as much as ones under 24 months," says Jamison. "But if they're newer than 24 months, they can seriously damage your credit." If you have both charge-offs and collection accounts, but have limited funds, pay off the past due balances first, then pay collection accounts as long as the collectors agree to remove all references to credit bureaus.
SOURCE: REALTOR® Magazine Online
"Individuals can positively affect their credit scores in as little as three weeks," says Edward Jamison, a Los Angeles-based credit attorney. "It's just a matter of getting educated and focused on the best, fastest, and most reliable course of action."
Jamison, who you may know as a credit expert on the NBC show, “Starting Over,” offers these six tips for improving credit strength quickly.
1. Know your limits. Borrowers should first check their credit limits and evenly distribute the balances they're carrying to help increase their credit scores, or better yet, pay them off in full to get the highest score increase. "Make sure your maximum limit is reported," Jamison says. "When no limit is reported, credit scoring software presumes the account is maxed out."
2. Bring the balances near zero. The credit scoring software scores more favorably to those with a closer balance to zero. Balances over 70 percent damage credit the most, followed by the next tier of 50 percent and then 30 percent of the maximum credit limit. "Rather than carrying a large balance in an unfavorable tier, redistribute outstanding balances over several credit cards," advises Jamison.
3. Don’t cancel your cards. "Closing credit card accounts can hurt your score unless the accounts were opened less than two years ago, and you have over six credit cards," Jamison says. Fair Isaac's credit scoring software assumes that people who have had credit for a longer time are at less risk of defaulting on payments.
4. Eliminate late payments (but ask nice). Get rid of late payments listed on the credit report. "Contact the creditors that report late payments and request a good faith adjustment that removes the late payments reported on your account," Jamison says. The creditor may work with you, but it may require more than one phone call; patience is required. Your odds of success will dwindle if you're rude or unclear about your request, he adds.
5. Get rid of collection accounts. But only if the collection agency agrees to delete them in return. Paying them off can otherwise actually lead to a decreased credit score due to the date of last activity getting updated to the current date when you pay. The consumer should contact the collector and request a letter explicitly stating the agreement to delete the account upon receipt or clearance of the payment, Jamison says. Not all collection agencies will delete reporting, but it's certainly worth the effort.
6. Pay off past due amounts on accounts that are not in charge-off status. After that, Jamison advises getting rid of charge-offs and liens that are less than two years old. "Charge-offs and liens that are older than 24 months do not affect your credit score nearly as much as ones under 24 months," says Jamison. "But if they're newer than 24 months, they can seriously damage your credit." If you have both charge-offs and collection accounts, but have limited funds, pay off the past due balances first, then pay collection accounts as long as the collectors agree to remove all references to credit bureaus.
SOURCE: REALTOR® Magazine Online
Wednesday, July 18, 2007
Bernanke: Economy Will Expand at 'Moderate Pace'
Federal Reserve Chairman Ben Bernanke told Congress Wednesday that the economy has emerged from its anemic spell, but overall growth for the year will be lower than expected. Inflation remains the chief concern, he said.
Delivering a midyear Fed economic report to Capitol Hill, Bernanke struck a somewhat cautious tone. He suggested that the economy appears likely to expand "at a moderate pace" over the second half.
Still, the Fed chief told the House Financial Services Committee that growth this year will be a bit slower than the Fed projected in February. Growth should strengthen a bit next year, he said. The inflation forecast, however, wasn't changed. It calls for prices other than food and energy to edge lower.
Against this backdrop, the Fed is likely to leave interest rates where they are through the rest of this year.
For just over a year, the Federal Reserve has held a key interest rate at 5.25 percent, providing a period of stability to borrowers. Before that, the Fed had boosted rates for two years to fend off inflation.
On Wall Street, stocks fell after Bear Stearns Cos. told investors there was little value left in two failed hedge funds, renewing concerns about risky mortgages.
Bernanke took pains Wednesday to hedge the Fed's bets and outline risks to the economy.
One risk is that energy and commodity prices could continue to rise sharply, boosting the prices of lots of other goods and services and thus spreading inflation through the economy.
The Fed "has consistently stated that upside risks to inflation are its predominant" concern, Bernanke said.
Gasoline prices, which peaked in May, receded somewhat in June and are now up past $3 a gallon.
Overall consumer prices calmed down in June, the government reported Wednesday. They rose by just 0.2 percent -- the smallest increase in five months.
Another risk is that the housing slump could turn out worse than expected, sapping consumer spending and possibly causing overall economic growth to be weaker.
The economy barely budged in the first quarter, growing at pace of just 0.7 percent, the worst in more than four years. The sour housing market was the principal culprit.
The housing market will remain sluggish for some time, partly because of some now tighter lending standards and the recent rise in mortgage rates, Bernanke said.
Even if the demand for housing were to stabilize somewhat, the pace of new home building will probably fall as builders work down excess stocks of unsold homes, he said.
"Thus declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time," Bernanke said.
Bernanke also outlined efforts by regulators to deal with problems in the market for risky mortgages. Those are mortgages made to people with spotty credit histories.
Foreclosures and delinquencies for these "subprime" mortgages have spiked. Some big subprime lenders have been forced out of business.
Borrowers and lenders have been clobbered by rising interest rates and weak home values. Congress has blasted the Fed and other regulators for not doing enough to crack down on lax lending standards, which had contributed to the problems.
"Rising delinquencies and foreclosures are creating personal, economic and social distress for many homeowners and communities -- problems that likely will get worse before they get better," Bernanke said.
To better protect consumers, the Fed is looking at ways to improve mortgage disclosure and ways to curb unfair or deceptive lending practices. It also is encouraging lenders to work with troubled homeowners.
In new economic projections, the Fed expects the economy to grow between 2.25 and 2.50 percent, as measured from the fourth quarter of last year to the fourth quarter of this year. That's lower than the old forecast of 2.5 percent and 3 percent.
For 2008, the economy should pick up and expand between 2.50 and 2.75 percent.
"Core" inflation, meanwhile, should increase by 2 percent and 2.25 percent this year, the same as the previous projection. Core inflation excludes the more volatile categories of energy and food.
The unemployment rate -- currently at 4.5 percent -- could rise as high as 4.75 percent this year, which would still be considered relatively low by historical standards. That's also unchanged from the Fed's old forecast.
Source: Associated Press
Delivering a midyear Fed economic report to Capitol Hill, Bernanke struck a somewhat cautious tone. He suggested that the economy appears likely to expand "at a moderate pace" over the second half.
Still, the Fed chief told the House Financial Services Committee that growth this year will be a bit slower than the Fed projected in February. Growth should strengthen a bit next year, he said. The inflation forecast, however, wasn't changed. It calls for prices other than food and energy to edge lower.
Against this backdrop, the Fed is likely to leave interest rates where they are through the rest of this year.
For just over a year, the Federal Reserve has held a key interest rate at 5.25 percent, providing a period of stability to borrowers. Before that, the Fed had boosted rates for two years to fend off inflation.
On Wall Street, stocks fell after Bear Stearns Cos. told investors there was little value left in two failed hedge funds, renewing concerns about risky mortgages.
Bernanke took pains Wednesday to hedge the Fed's bets and outline risks to the economy.
One risk is that energy and commodity prices could continue to rise sharply, boosting the prices of lots of other goods and services and thus spreading inflation through the economy.
The Fed "has consistently stated that upside risks to inflation are its predominant" concern, Bernanke said.
Gasoline prices, which peaked in May, receded somewhat in June and are now up past $3 a gallon.
Overall consumer prices calmed down in June, the government reported Wednesday. They rose by just 0.2 percent -- the smallest increase in five months.
Another risk is that the housing slump could turn out worse than expected, sapping consumer spending and possibly causing overall economic growth to be weaker.
The economy barely budged in the first quarter, growing at pace of just 0.7 percent, the worst in more than four years. The sour housing market was the principal culprit.
The housing market will remain sluggish for some time, partly because of some now tighter lending standards and the recent rise in mortgage rates, Bernanke said.
Even if the demand for housing were to stabilize somewhat, the pace of new home building will probably fall as builders work down excess stocks of unsold homes, he said.
"Thus declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time," Bernanke said.
Bernanke also outlined efforts by regulators to deal with problems in the market for risky mortgages. Those are mortgages made to people with spotty credit histories.
Foreclosures and delinquencies for these "subprime" mortgages have spiked. Some big subprime lenders have been forced out of business.
Borrowers and lenders have been clobbered by rising interest rates and weak home values. Congress has blasted the Fed and other regulators for not doing enough to crack down on lax lending standards, which had contributed to the problems.
"Rising delinquencies and foreclosures are creating personal, economic and social distress for many homeowners and communities -- problems that likely will get worse before they get better," Bernanke said.
To better protect consumers, the Fed is looking at ways to improve mortgage disclosure and ways to curb unfair or deceptive lending practices. It also is encouraging lenders to work with troubled homeowners.
In new economic projections, the Fed expects the economy to grow between 2.25 and 2.50 percent, as measured from the fourth quarter of last year to the fourth quarter of this year. That's lower than the old forecast of 2.5 percent and 3 percent.
For 2008, the economy should pick up and expand between 2.50 and 2.75 percent.
"Core" inflation, meanwhile, should increase by 2 percent and 2.25 percent this year, the same as the previous projection. Core inflation excludes the more volatile categories of energy and food.
The unemployment rate -- currently at 4.5 percent -- could rise as high as 4.75 percent this year, which would still be considered relatively low by historical standards. That's also unchanged from the Fed's old forecast.
Source: Associated Press
Monday, July 16, 2007
Preapproved or Prequalified: What's the Difference?
Confusing prequalification with preapproval can mean disappointment for both a home seller and a buyer. Real estate experts say it's smart to urge buyers to become preapproved by their lender – not just prequalified.
For a buyer to obtain a bona fide preapproval, he must submit a loan application with the necessary documentation and fee. After the lender verifies and analyzes the application, it will notify the applicant of how much money he can afford to borrow. Armed with that information, the buyer can confidently go home shopping.
Prequalifications are simply an estimate of what a buyer can afford. A buyer who assumes that this estimate is accurate and chooses a home based on the information may, in fact, be denied a loan when he actually applies, a situation that wastes his time and can put a seller in an a bad position if they've already turned away a qualified buyer. And, of course it wastes the real estate practitioner's time as well.
Source: Kiplinger’s Personal Finance Magazine (08/01/2007)
For a buyer to obtain a bona fide preapproval, he must submit a loan application with the necessary documentation and fee. After the lender verifies and analyzes the application, it will notify the applicant of how much money he can afford to borrow. Armed with that information, the buyer can confidently go home shopping.
Prequalifications are simply an estimate of what a buyer can afford. A buyer who assumes that this estimate is accurate and chooses a home based on the information may, in fact, be denied a loan when he actually applies, a situation that wastes his time and can put a seller in an a bad position if they've already turned away a qualified buyer. And, of course it wastes the real estate practitioner's time as well.
Source: Kiplinger’s Personal Finance Magazine (08/01/2007)
Friday, July 13, 2007
Mortgage Rates Climb This Week
Freddie Mac reports an increase in the 30-year fixed mortgage rate to 6.73 percent this week, up from 6.63 percent a week ago. Chief Economist Frank Nothaft expects the benchmark to remain at or near this level for the remainder of the year.
The 15-year mortgage rate edged up at 6.39 percent from 6.3 percent over the same time span, and the five-year adjustable mortgage rate climbed to 6.35 percent from 6.29 percent.
Meanwhile, interest on one-year ARMs held steady at 5.71 percent. Nothaft attributes the jump in borrowing costs to a positive June jobs report and a jump in consumer credit in May.
Source: The Wall Street Journal (07/13/07)
The 15-year mortgage rate edged up at 6.39 percent from 6.3 percent over the same time span, and the five-year adjustable mortgage rate climbed to 6.35 percent from 6.29 percent.
Meanwhile, interest on one-year ARMs held steady at 5.71 percent. Nothaft attributes the jump in borrowing costs to a positive June jobs report and a jump in consumer credit in May.
Source: The Wall Street Journal (07/13/07)
Thursday, July 12, 2007
Mortgage Foreclosure Rate Falls from May High
U.S. home foreclosure filings fell 7 percent in June to 164,644 with 33 states reporting month-over-month decreases, according to data from RealtyTrac.
The rate remained 87 percent above last June’s pace, but it was less than the 30-month high reached in May.
Nevada had the highest foreclosure rate, with one filing in June for every 175 households. Rounding out the top 10 were: California, Colorado, Florida, Arizona, Ohio, Michigan, Georgia, Connecticut, and Indiana.
Source: Reuters News (07/12/2007)
The rate remained 87 percent above last June’s pace, but it was less than the 30-month high reached in May.
Nevada had the highest foreclosure rate, with one filing in June for every 175 households. Rounding out the top 10 were: California, Colorado, Florida, Arizona, Ohio, Michigan, Georgia, Connecticut, and Indiana.
Source: Reuters News (07/12/2007)
Friday, July 6, 2007
Thursday, July 5, 2007
What's the Cost of Going Solar?
The cost of solar panels has fallen by half in the past 15 years, cutting the cost of a system capable of powering a home to about $30,000. Analysts expect the cost to fall even more rapidly in the next few years.
Throw in tax breaks and other incentives offered in some states, and the systems can often pay for themselves within a decade. To find out if there are incentives available in your area, check out the online Database of State Incentives for Renewables & Efficiency.
What other costs can you expect when going solar? Setup costs can include as much as $1,500 for upgrading your fuse box. Another issue is the roof, which might be unable to support the solar panels. Eliminating shade from trees on the property also has a cost beyond sentimental reluctance.
However, the hefty costs pay off when it's time to sell. According to a study by ICF consulting, every $1 reduction in annual fuel bills increases a home’s resale value by $10 to $25.
If you decide to take the solar plunge, look for installers who have been approved by the North American Board of Certified Energy Practitioners, which requires professionals to pass a four-hour exam and have at least one year of experience in the field.
Source: SmartMoney, Daren Fonda (07/01/2007)
Throw in tax breaks and other incentives offered in some states, and the systems can often pay for themselves within a decade. To find out if there are incentives available in your area, check out the online Database of State Incentives for Renewables & Efficiency.
What other costs can you expect when going solar? Setup costs can include as much as $1,500 for upgrading your fuse box. Another issue is the roof, which might be unable to support the solar panels. Eliminating shade from trees on the property also has a cost beyond sentimental reluctance.
However, the hefty costs pay off when it's time to sell. According to a study by ICF consulting, every $1 reduction in annual fuel bills increases a home’s resale value by $10 to $25.
If you decide to take the solar plunge, look for installers who have been approved by the North American Board of Certified Energy Practitioners, which requires professionals to pass a four-hour exam and have at least one year of experience in the field.
Source: SmartMoney, Daren Fonda (07/01/2007)
Wednesday, July 4, 2007
Fast Facts about California housing
Calif. median home price - May 07: $591,180
(Source: C.A.R.)
Calif. highest median home price by C.A.R. region May 07: Santa Barbara So. Coast $1,325,000
(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region May 07: High Desert $313,550
(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - First Quarter 07:25 percent
(Source: C.A.R.)
Mortgage rates - week ending 6/28:
30-yr. fixed: 6.67%; Fees/points: 0.4%
15-yr. fixed: 6.34%; Fees/points: 0.4%
1-yr. adjustable: 5.65%; Fees/points: 0.5%
(Source: Freddie Mac)
(Source: C.A.R.)
Calif. highest median home price by C.A.R. region May 07: Santa Barbara So. Coast $1,325,000
(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region May 07: High Desert $313,550
(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - First Quarter 07:25 percent
(Source: C.A.R.)
Mortgage rates - week ending 6/28:
30-yr. fixed: 6.67%; Fees/points: 0.4%
15-yr. fixed: 6.34%; Fees/points: 0.4%
1-yr. adjustable: 5.65%; Fees/points: 0.5%
(Source: Freddie Mac)
Monday, July 2, 2007
Fed Leaves Key Interest Rate Untouched
Federal Reserve policymakers voted unanimously last week to leave the key short-term interest rate at 5.25 percent, which is the highest in 6 ½ years, but unchanged since June 2006.
In the post-meeting statement, Fed Chairman Ben Bernanke said the economy is expected to continue to grow at a moderate pace during the rest of the year. He suggested that growth isn’t strong enough to warrant a rate increase to slow it.
"Some market participants may have been holding out for a signal that (the Fed) will cut rates, and they didn't get that," says chief economist Scott Brown of Raymond James & Associates. He says he expects the Fed to leave rates unchanged for the rest of 2007, but isn't sure where rates will be headed after that. "The next move is as likely to be higher as it is to be lower."
This short-term interest rate drives mortgage and other sorts of consumer loan rates.
Source: USA Today, Barbara Hagen Baugh (06/29/2007)
In the post-meeting statement, Fed Chairman Ben Bernanke said the economy is expected to continue to grow at a moderate pace during the rest of the year. He suggested that growth isn’t strong enough to warrant a rate increase to slow it.
"Some market participants may have been holding out for a signal that (the Fed) will cut rates, and they didn't get that," says chief economist Scott Brown of Raymond James & Associates. He says he expects the Fed to leave rates unchanged for the rest of 2007, but isn't sure where rates will be headed after that. "The next move is as likely to be higher as it is to be lower."
This short-term interest rate drives mortgage and other sorts of consumer loan rates.
Source: USA Today, Barbara Hagen Baugh (06/29/2007)
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