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INTEREST RATE INFO
We read the following news alert and immediately called Tricia Morris for her comments as we are very concerned about interest rates increasing and the impact it would have. Below is the news alert and also Tricia’s response:
NEWS ALERT:
Federal Reserve Raises Interest Rate Charged to Banks, In First Move Since 2008
The Federal Reserve, taking its first step to return lending to normal after more than two years of extraordinary actions to prop up the economy, on Thursday raised its discount rate
— the interest rate it charges on emergency loans to banks
— by one-quarter percentage point.
The increase, to 0.75 percent from 0.50 percent, takes effect on Friday.
Officials said the move was not meant to be a broad tightening of credit. Rather, they said, it was intended to discourage emergency borrowing when other financing is available to banks.
The discount rate had been at 0.50 percent since December 2008.
TRICIA’S RESPONSE TO THE QUESTION ABOUT WHAT NOW WITH RATES?
It’s been anticipated for some time that the interest rates would be going up. This will probably happen for a couple of reasons. The Government has been subsidizing the low rates and continued lower rates would be inflationary.
It has been announced that the Government would stop buying mortgage backed securities at the end of March and now it appears that an increase in the discount rate is also imminent. This is the rate that determines the cost of funds for banks.
There’s no question that now is an optimal time for obtaining a mortgage loan and anyone that is interested in purchasing would do well to take advantage of the current interest rate.
Much Aloha,
Tricia
Hawaii’s Premiere Mortgage Company
535 Lipoa Parkway, Suite 101
Kihei, Hawaii 96753
808.874.8800 x116 / 800.813.7711 x116 / Fax: 808.874.1188
mailto:tricia@mortgagemaui.com
Hawaii’s Premiere Mortgage Company
BEST BUYS ~ SOUTH MAUI CONDOS
South Maui Condominium
Best Buy List
As of February 18, 2010
Price Condominium Loc Vac Comments
$ 135,900 Waipuilani 206 NK N 1BR (REO) Loc Price!
$ 169,000 Kalama Terrace P101 SK Y 1BR Location Price!
$ 175,000 Kihei Shores J203 (New) SK N 2BR Oceanviews & Price!
$ 180,000 Maui Gardens A207 SK N 1BR (short sale)Nice &Price
$ 194,000 Kihei Garden Estate G103 NK Y 1BR (REO) Loc & Price!
$ 199,000 Keonekai Village 18201 SK N 2BR (short sale)Nice &Price
$ 241,000 Kihei Kai 3 (New) NK Y 1BR (short sale) Oceanfront!
$ 289,957 Kauhale Makai 329 NK Y 1BR Price Views Oceanfront
$ 295,000 Hale Kai O Kihei 213 NK Y 1BR (short sale) Oceanfront!
$ 325,000 Maui Banyan H114 SK Y 1BR Location & Price!
$ 335,000 Luana Kai A106 NK Y 1BR Price & Oceanfront!
$ 335,000 Kamole Sands 4-208 SK Y 1BR Price & Location!
$ 345,000 Awihi Townhouse 4 SK N 2BR Price Gar Oceanviews!
$ 395,000 Island Sands 410 (New) M Y 1BR Nice Oceanfront!
$ 429,000 Kam Beach Royale 605 SK Y 1BR Nice Oceanviews!
$ 489,000 Grand Champions 37 W Y 2BR Large & Price!
$ 498,000 Grand Champions 172 W Y 1BR On GC & Oceanviews!
$ 535,000 Wailea Fairway Villa P103 W N 2BR On GC & Oceanviews!
$ 579,000 Kihei Beach 503 (New) NK Y 1BR Nice Oceanfront!
$ 599,000 Palms at Wailea 202 W Y 1BR Nice & Price!
$ 670,000 Wailea Ekolu 304 W Y 1BR GC & Oceanviews!
$ 695,000 Wailea Ekolu 1405 W Y 2BR Price, Quiet Oceanviews
$ 729,000 Royal Mauian 508 SK Y 1BR Beautiful Oceanfront!
$ 759,000 Wailea Palms 3302 W N 1BR Price Loc & Views!
$ 825,000 Palms at Wailea 206 W Y 2BR Price Loc & Nice!
$ 849,000 Kai Malu 20B W N 3BR Res Condo & Price!
$ 999,000 Hokulani Golf Villa 4 SK N 2BR Res Golf Course Condo!
$1,150,000 Hale Hui Kai 210 SK Y 2BR Beautiful Oceanfront!
$1,249,000 Royal Mauian 610 SK Y 2BR Beautiful Oceanfront!
$1,795,000 Hoolei T-1 W Y 3BR New, Large, Price!
$2,700,000 Makena Surf B206 Mak Y 2BR Spectacular Oceanfront!
$2,950,000 Polo Beach 802 W Y 2BR Spectacular Oceanfront!
$3,900,000 Wailea Elua 1005 W Y 2BR Spectacular Oceanfront!
(New) = New Additions to List Vac = Vacation Rentals allowed in project
INTEREST RATES MAY GO UP VERY SOON! See Tricia's newsletter
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| For the week of Feb 15, 2010 — Vol. 8, Issue 7 |
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Last Week in Review |
| “IT AIN’T OVER TIL IT’S OVER.” Yogi Berra. And whether you find those words deeply wise or simply puzzling…The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over – and this translates to home loan rates rising in the near future. As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen. This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. And those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking. ———————– Chart: The Fed’s Purchase of MBS (By Month) Also last week, Fed Chairman Ben Bernanke provided a speech on a number of topics, perhaps the most important of these being switching the Fed’s benchmark from the commonly watched and monitored Fed Funds Rate, to a new benchmark of “interest paid on excess reserves”. Banks are required to keep money on reserve with the Fed and may, from time to time, have an excess in those reserves, which the Fed can pay interest on. |
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Forecast for the Week |
| The financial markets will be closed on Monday in observance of Presidents Day, and in terms of economic reports, there won’t be much action until midweek. On Wednesday, we’ll get a look at the health of the housing industry with reports on Housing Starts and Building Permits for January. It will be interesting to watch the housing reports over the next several months, as many people are acting to take advantage of currently low home loan rates that may be on the rise soon, as well as the potential of a juicy tax credit. Remember – the Homebuyers Tax Credit is only available on homes purchased with a contract date before April 30th, and the transaction must settle by June 30th. We’ll also get an update on inflation this Thursday, as the Producer Price Index will be released. This index measures price changes for wholesalers, and prefaces the more important Consumer Price Index coming on Friday, which measures changes in the price paid by consumers for goods and services. These reports are both particularly important, as the Fed will be watching very carefully for any signs of inflation. If inflation begins to rise, the Fed will have no choice but to begin to hike rates to fight off the dangers that inflation could pose to our economy. In addition to those reports, we’ll get our weekly look at employment through the Initial Jobless Claims data. Last week’s report showed some encouraging signs, but there is still a long way to go before we’ll see stabilization in the Unemployment Rate and some meaningful job creation. At the moment, 6.3 Million people remain unemployed for over six months – an increase of 5 million since the start of the recession in December of 2007. To reach the White House’s projection of a 6% unemployment rate by 2015, the US would need to create 225,000 jobs per month, every month, for the next five years. But that kind of long term job growth has never been seen before. The year 2006, was the only year in US history that had job gains average over 225,000. But that was for just a single year – doing it for five years may be too much of a stretch. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bond prices and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bond prices fell early last week due to weak results from the Treasury auctions, but were able to rally towards the end of the week. When Bond prices are moving higher, home loan rates are improving – so I’ll be watching out to see if the current ground can be held. If you have any questions about how home loan rates move – and if an opportunity exists that would benefit you – please don’t hesitate to call or email me. Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 12, 2010) |
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The Mortgage Market View… |
| Keeping Your Home Safe from Water Damage Preventing water damage in your home is important at any time of year, but particularly in the winter when the cold weather can wreak havoc on plumbing. Here are some tips to make sure your water bill is as low as it should be…and that your home is as safe and dry as it needs to be: Pay attention to your bill: Major fluctuations in water usage from one month to the next could mean that you have a problem. Taking just a few minutes to look at your bill each month could make a big difference in your wallet! Inspect appliances: While much of your home’s plumbing can be hidden behind walls and cabinets, most of your appliances that use water can be easily inspected for potential leaks. Each month, take the time to inspect areas around your water heater, dishwasher, refrigerator, washing machine, sinks, and toilets. If any hoses or seals appear old or damaged, replace them. Also, inspect and repair obvious caulking and tile grout damage. It’s a small price to pay for what could be expensive repairs later. Inspect the sewer line: Clear away build-up and roots from around your sewer line. Obstructions in this area could create major plumbing problems in the future. Check your water pressure annually: This is easier than it sounds. Simply purchase a pressure gauge and attach it to the hose faucet. Normal results should range from 45 to 65 pounds per square inch (psi). A reading above 65 psi is considered high and could lead to problems down the line. Find and fix leaks quickly: Make a habit of checking the main fixtures regularly so that when something out of the ordinary occurs you will notice it and take action immediately. Sometimes, however, slow water leaks aren’t very obvious. A great way to discover hidden leaks is to look for stains in areas where water is often used. For example, if you see even small stains on the cabinet floors beneath the sink in the kitchen or bathrooms, you could have a problem. Warm spots in the floor or tiles could also be an indication of hidden water damage. Before a vacation: The worst thing to come home to after a great vacation is major water damage. Consider turning off your water while you’re gone. For many homeowners there is a separate shut-off valve for the home that doesn’t affect your irrigation system. The bottom line is that a little time and effort can make a big difference when it comes to keeping your home safe and dry, and your expenses at a minimum! |
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The Week’s Economic Indicator Calendar |
| Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of February 15 – February 19
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| This newsletter was sent to you because you have indicated an interest in receiving communications from Premiere Mortgage, which we believe will help you in your business. If you wish to no longer receive these newsletters, please send your request to: tricia@mortgagemaui.com The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors. As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: tricia@mortgagemaui.com If you prefer to send your removal request by mail the address is: Tricia Morris 535 Lipoa Pkwy, Suite 101 Kihei, HI 96753 |
MAUI HOME SALES UP! MAHALO TO THE HONOLULU ADVERTISER FOR THIS ARTICLE
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 February 9, 2010 Maui home sales up 48% from 2009 Condo sales plunge 31%, but figures are skewed by project’s debut last year Maui’s housing market experienced dramatic swings in sales of single-family homes and condominiums in January compared with the same month a year earlier. There were 46 single-family home sales on the Valley Isle last month, a 48 percent rise over 31 in the same month a year before, according to the Realtors Association of Maui. The strong gain coincided with big jumps in January sales reported earlier on O’ahu, Kaua’i and the Big Island. But for Maui the jump came off a dramatic year-ago low. Sales in January 2009 marked a low for any month since February 1997, according to trade association data. Also lackluster was the median sale price that was down 16 percent to $469,000 last month from $558,000 a year earlier. The number of Maui condo sales was down 31 percent to 71 last month, from 108 a year earlier. Again, the year-ago figure was somewhat of an anomaly as the most for any month since 2007 when Hawai’i’s housing market was still hot. A new condo project in Kä’anapali called Honua Kai helped produce many of the sales in January 2009, according to Terry Tolman, chief executive of the Realtors Association of Maui, which includes sales of previously owned and new homes in its data, unlike data compiled by the Honolulu Board of Realtors that excludes new-home sales. The median price for Maui condos was down 47 percent to $424,000 last month from $805,000 a year earlier. Again, the swing was influenced by the Honua Kai project. In Kä’anapali, there were eight condo sales last month for a median $722,500. A year earlier, there were 69 sales for a median $1.17 million. The median is a point at which half the sales were for a higher price and half for a lower price, so a large number of new luxury condos will push the median higher. |
Hawaii Real Estate Blog 