The next 30 minutes are reserved to share with you some of the Real Estate News in your local area and how it affects you. Every marketplace has obstacles. I hope that today’s show provides some practical solutions in an effort to help you on the path to finding new opportunities.
Please feel free to call me, Peter Buchsbaum at 215-740-8999 or visit www.peterbuchsbaum.com.
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So last week I was on my own paying homage to my father for fathers day.
This week the Real Estate News included Mortgage Rates Approach 4%. That’s correct as the prices of homes is rising so are the interest rates. The 30 year fixed rate according to Freddie Mac have risen 5/8th of a percent since May 2nd. This increase certainly pushes the cost of homeownership higher but not a lot. The rate one year ago was 3.72%. The real reason the rates are going up. Rates do not rise by accident. There is always a cause and effect. This time the cause is the stock and bond markets anticipation that Mr. Bernanke and the Federal Reserve will stop stimulating the economy by buying US bonds. This is an overreaction in my opinion but still a threat to more increases. Builders say housing is back. So the housing recovery seems real for sure. Just ask a builder. A key measure of home builder confidence was up dramatically this week and crossed a major threshold moving from 44 to 52. The National Association of Home Builders said that 41% of the respondents saw current conditions as positive. That number was 15% a year ago. The Federal Reserve helps pull down the Dow.
Today I am on my own to discuss what the media does not want you to know. That’s right each week the stock market releases a plethora of reports. Headline numbers sell but what do the real numbers tell you. What Ben Bernanke actually said not what they think he said. As an aside I often explain that there is no need to interpret what I say. Just take it word for word and we will both be on the same page. Ben Bernanke the Federal Reserve Chairman who ultimately determines the course of interest rates thinks that the stock and bond markets want clarity and transparency. Boy was he wrong. Mr. Bernanke said the Federal reserve will tapper the number of bonds they buy IF the unemployment rate moves to 7% (currently 7.6%) and they will stop buying bonds IF the unemployment rate moves to 6.5%. He added that the first level could possibly be achieved in late 2013 and that the second level may possibly be reached by late 2014. The stock and bond markets heard THE FED IS NO LONGER BUYING BONDS! Hence the interest rates on Mortgage moved three quarters of a point in 3 days. Transparency only works if those you are speaking to are rational thinking people. Obviously Ben’s audience was not very rational.
Access www.PeterBuchsbaum.com on Sunday morning to listen to the discussion to learn what they don’t want you to know.
In combination with CBS and WPHT 1210 am we have also been fortunate enough to have been asked to write some articles in “Local Living Magazine” to explore some of the questions you all ask us and the answers we provide. Look for your latest issue this month. For a FREE subscription please email us.
Each week we discuss the myths of the mortgage market. It is not about rate. A higher rate with no mortgage insurance may provide a lower payment.