Tuesday, March 30, 2010
Friday, March 19, 2010
Mortgages under 5% are back in bloom
The possibility of securing a mortgage rate below 5% has greatly improved in recent weeks, in a positive sign for would-be home buyers.
Home mortgage rates fell for the sixth straight week, according to two key measures, with one of them pointing to a sub-5% rate for the 30-year fixed loan for the second week in a row.
Freddie Mac's (FRE, Fortune 500) weekly report said the 30-year rate slipped to 4.87% for the week ended Thursday, the lowest since May. According to the mortgage backer, last week's rates stood at 4.94%.
Mortgage tracker Bankrate.com said the average 30-year fixed loan slipped to 5.22% from 5.25% the previous week. The 15-year fixed rate also fell, Bankrate said, to 4.6% from 4.64% the week before.
The 30-year rate is influenced by the benchmark 10-year note's yield, which moves in the opposite direction of its price. Treasury prices have risen over the past week as $78 billion worth of auctions received above-average demand.
"Another disappointing employment report had investors questioning the strength and sustainability of the economic rebound," the Bankrate report said. "The resulting uncertainty drove investors into the safety of government and mortgage-backed bonds."
"Not even a substantial auction of government debt has been enough to derail the streak of declining mortgage rates," the Bankrate report said.
Rates are returning to levels not seen since the spring when, in an effort to cap mortgage rates, the Federal Reserve began a campaign to buy back $300 billion in Treasurys. The Fed hoped that it would spark demand and keep yields -- and therefore, mortgage rates -- in check.
Mortgage rates fell as refinancings abounded. But those benefits seemed to wear off, as rates started on a tear in the summer. By June, the benchmark 10-year bond's yield had increased steadily to hover around 4%.
Now the central bank has less than $15 billion left to spend on its buyback program, which led some investors to worry that yields would soar again. So far, that's not the case.
On Wednesday, reports said Democratic congressional leaders were working to extend a $8,000 tax credit for first-time home buyers past the Nov. 30 expiration date and could even make it available to current homeowners who buy a new house.
Homeowners have received a boost from both the tax credit and the lower rates -- last year, the average 30-year fixed mortgage rate was 6.2%, according to Bankrate.
To translate the difference in mortgage rate into dollars, consider a $200,000 loan. At last year's rate of 6.2%, the monthly payment would be $1,224.94, or $124 higher than the monthly payment at the current rate.
The low rates helped mortgage applications surge by 16.4% last week, according to a separate report.
Home mortgage rates fell for the sixth straight week, according to two key measures, with one of them pointing to a sub-5% rate for the 30-year fixed loan for the second week in a row.
Freddie Mac's (FRE, Fortune 500) weekly report said the 30-year rate slipped to 4.87% for the week ended Thursday, the lowest since May. According to the mortgage backer, last week's rates stood at 4.94%.
Mortgage tracker Bankrate.com said the average 30-year fixed loan slipped to 5.22% from 5.25% the previous week. The 15-year fixed rate also fell, Bankrate said, to 4.6% from 4.64% the week before.
The 30-year rate is influenced by the benchmark 10-year note's yield, which moves in the opposite direction of its price. Treasury prices have risen over the past week as $78 billion worth of auctions received above-average demand.
"Another disappointing employment report had investors questioning the strength and sustainability of the economic rebound," the Bankrate report said. "The resulting uncertainty drove investors into the safety of government and mortgage-backed bonds."
"Not even a substantial auction of government debt has been enough to derail the streak of declining mortgage rates," the Bankrate report said.
Rates are returning to levels not seen since the spring when, in an effort to cap mortgage rates, the Federal Reserve began a campaign to buy back $300 billion in Treasurys. The Fed hoped that it would spark demand and keep yields -- and therefore, mortgage rates -- in check.
Mortgage rates fell as refinancings abounded. But those benefits seemed to wear off, as rates started on a tear in the summer. By June, the benchmark 10-year bond's yield had increased steadily to hover around 4%.
Now the central bank has less than $15 billion left to spend on its buyback program, which led some investors to worry that yields would soar again. So far, that's not the case.
On Wednesday, reports said Democratic congressional leaders were working to extend a $8,000 tax credit for first-time home buyers past the Nov. 30 expiration date and could even make it available to current homeowners who buy a new house.
Homeowners have received a boost from both the tax credit and the lower rates -- last year, the average 30-year fixed mortgage rate was 6.2%, according to Bankrate.
To translate the difference in mortgage rate into dollars, consider a $200,000 loan. At last year's rate of 6.2%, the monthly payment would be $1,224.94, or $124 higher than the monthly payment at the current rate.
The low rates helped mortgage applications surge by 16.4% last week, according to a separate report.
Wednesday, March 10, 2010
Jobless claims bill OK'd by Senate
The Senate on Wednesday approved a wide-ranging bill that would push back the deadline to file for extended unemployment insurance until year-end and extends dozens of expired tax breaks.
The bill, passed by a 62-36 vote, is the latest job creation effort to go before lawmakers, though it contains virtually no new initiatives to boost employment. Its price tag has wavered between $140 billion and $150 billion, which is partially offset. Its next stop is the House, where a quick passage is anything but assured.
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Lawmakers have come under pressure from both the White House and unemployed Americans to do more to spur hiring. But after many speeches, officials have enacted little to help the nearly 15 million looking for work.
The latest efforts -- which include a $15 billion job creation initiative that the Senate will take up next -- don't sit well with members from either side of the aisle. Some say that more must be done to boost employment. Others, particularly Congressional Republicans, have voiced concerns about adding to the deficit.
While the House passed a comprehensive $154 billion job creation bill in December, the Senate has opted to address the unemployment issue with a series of smaller measures. Senate Majority Leader Harry Reid, D-Nev., has said he will soon unveil additional efforts, including those aimed at small businesses.
In this bill
The bill passed Wednesday would push back the deadline to file for extended jobless benefits and the federal subsidy for COBRA health insurance until Dec. 31.
Federal unemployment benefits kick in after the basic state-funded 26 weeks of coverage expire. These federal benefits, worth up to 73 weeks, are divided into tiers, and the jobless must apply each time they move into a new tier.
The measure would also extend dozens of tax provisions -- including allowing teachers to deduct education expenses and providing businesses a research and development credit -- that expired at the end of last year.
"Getting Americans back to work is a critical priority and extending the tax cuts and benefits in this bill will help build the stable environment we need for job creation," said Senate Finance Committee Chairman Max Baucus, D-Mont., who co-sponsored the bill.
It would also temporarily halt a 21% reduction in Medicare physician reimbursement rates. And it would send another $25 billion to the states to help them fund their Medicaid programs for another six months.
The bill also extends two Recovery Act provisions for small businesses. It provides $354 million to continue funding the increased Small Business Administration guarantee and fee waiver through year's end.
Next up
Next up is a $15 billion bill that would:
--Exempt employers from Social Security payroll taxes on new hires who were unemployed.
--Fund highway and transit programs through 2010.
--Extend a tax break for business that spend money on capital investments, such as equipment purchases.
--Expand the use of the Build America Bonds program, which helps states and municipalities fund capital construction projects.
The Senate already passed this measure, but then the House amended it last week, sending it back to the Senate. Should it pass again, this time unchanged, the bill would go to President Obama for his signature.
The bill, passed by a 62-36 vote, is the latest job creation effort to go before lawmakers, though it contains virtually no new initiatives to boost employment. Its price tag has wavered between $140 billion and $150 billion, which is partially offset. Its next stop is the House, where a quick passage is anything but assured.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
Lawmakers have come under pressure from both the White House and unemployed Americans to do more to spur hiring. But after many speeches, officials have enacted little to help the nearly 15 million looking for work.
The latest efforts -- which include a $15 billion job creation initiative that the Senate will take up next -- don't sit well with members from either side of the aisle. Some say that more must be done to boost employment. Others, particularly Congressional Republicans, have voiced concerns about adding to the deficit.
While the House passed a comprehensive $154 billion job creation bill in December, the Senate has opted to address the unemployment issue with a series of smaller measures. Senate Majority Leader Harry Reid, D-Nev., has said he will soon unveil additional efforts, including those aimed at small businesses.
In this bill
The bill passed Wednesday would push back the deadline to file for extended jobless benefits and the federal subsidy for COBRA health insurance until Dec. 31.
Federal unemployment benefits kick in after the basic state-funded 26 weeks of coverage expire. These federal benefits, worth up to 73 weeks, are divided into tiers, and the jobless must apply each time they move into a new tier.
The measure would also extend dozens of tax provisions -- including allowing teachers to deduct education expenses and providing businesses a research and development credit -- that expired at the end of last year.
"Getting Americans back to work is a critical priority and extending the tax cuts and benefits in this bill will help build the stable environment we need for job creation," said Senate Finance Committee Chairman Max Baucus, D-Mont., who co-sponsored the bill.
It would also temporarily halt a 21% reduction in Medicare physician reimbursement rates. And it would send another $25 billion to the states to help them fund their Medicaid programs for another six months.
The bill also extends two Recovery Act provisions for small businesses. It provides $354 million to continue funding the increased Small Business Administration guarantee and fee waiver through year's end.
Next up
Next up is a $15 billion bill that would:
--Exempt employers from Social Security payroll taxes on new hires who were unemployed.
--Fund highway and transit programs through 2010.
--Extend a tax break for business that spend money on capital investments, such as equipment purchases.
--Expand the use of the Build America Bonds program, which helps states and municipalities fund capital construction projects.
The Senate already passed this measure, but then the House amended it last week, sending it back to the Senate. Should it pass again, this time unchanged, the bill would go to President Obama for his signature.
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