I hope you enjoyed the long weekend. If you had to work yesterday, Iâ€™m sure all
the Presidentâ€™s thank you. I left the auto show yesterday wondering if there was
any car there that wasnâ€™t overpriced. I still canâ€™t think of one!
On todayâ€™s call: Markets, Housing, Home Equity Lines, Interest Rates
The markets are up today and the major indices are near five-year highs. Can you
believe Googleâ€™s per share cost is now over $800? I shouldâ€™ve been a tech geekâ€¦
Uncertainty in Europe continues though and homebuilder confidence dropped
from the previous month after a nice streak of gains. The rising cost of materials,
food, rent, health insurance, etc., coupled with continued job growth issues has
investors weighing the level of optimism that has been present lately. With that
being said, Iâ€™m officially convinced that the consumer confidence figures are fixed!
Lots of news from the Fed will be reported on Thursday so stay tuned for thatâ€¦
In housing, prices seem to be gaining steam everywhere around the country except
for Chicago. According to the latest Case-Schiller index for single-family home prices,
the level continues to drop here. For more info on home prices in Chicago, have a look
at this great article from Crainâ€™s today. I agree with the guy from DePaul: until the
foreclosure inventory is dramatically reduced and demand is increased, prices around
here will stay flat. Hopefully for buyers the interest rates will stay low (more on that
in a minute) and home affordability levels stay at record highs. Hereâ€™s the article:
Iâ€™ve talked about home equity lines of credit (â€œHELOCâ€) a few times, but itâ€™s good
to revisit as I have a few clients purchasing homes right now and taking advantage
of these programs. HELOCâ€™s are like revolving lines of credit for your home. You
have access to the line after youâ€™ve paid it down and can use the money for just
about anything. The terms are usually different and the rate adjusts with the prime
rate (currently 3.25%, which hasnâ€™t changed since December of 2008). Itâ€™s also a
great program for those wanting to put less than 20% down and therefore avoid
paying mortgage insurance. And generally, the payment with the HELOC is lower.
Interest rates are holding steady in the mid 3% range for the 30 year fixed program.
Weâ€™ve seen an alarming trend lately of consistent declines in the bond markets,
which coincides with the apparent optimism many investors seem to have these
days. As confidence in the economy increases and an assumption of job growth
among investors continues, these declines will gain steam, and rates will increase
at a steady pace. Letâ€™s hope that pace isnâ€™t too fast for would-be buyers and those
still needing to refinance.
Please pass this alongâ€¦Iâ€™d appreciate it. And donâ€™t hesitate to contact me with any
questions or comments.
Thanks and have a great weekâ€¦