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There is speculation that mortgage rates will head lower for the month of October, before heading higher come November. If you are looking to buy a home, now is the time to do it, before the first-time home buyer tax credit expires, and before the Fed stops buying Treasuries. Indeed, the Fed’s program has been part of the reason mortgage rates have been so low. Suprime Blogger offers this on mortgage interest rates after October:

If an all time low is possible it will have to happen in the month of October because after Halloween the Federal Reserve Bank will stop buying US Treasuries by the end of the month.  When the Fed stops buying US Treasuries you can expect to see an increase in treasury yields until they become attractive to foreign investors.  Without the assistance of the Fed and foreign investors there is little doubt that mortgage rates are going to go up as treasury yields increase.

For those who are ready to buy a home, the opportunity to take advantage of low prices and low mortgage rates is slipping away.

July home prices have been made “official”, and it appears as though they are higher overall again. This represents the sixth month that home prices have increased. While things appear to have slowed a bit in August, the fact remains that, overall, the housing market is starting to pick up again.

It is worth noting that the bottom of the housing market is picking up especially. Homes are moving, and prices are starting to pick up as demand increases. Additionally, there is likely to be a spike in activity as the deadline for the first-time home buyer tax credit deadline approaches. If you are planning on buying a home, now is a good time to make sure your ducks are in a row so that you can complete your purchase.

Yesterday, the Washington Post offered a rather disturbing story about the abuses in subprime lending that led to the mortgage market crash. It appears that as early as 1999, consumer advocates were warning about the need for increased regulation in the subprime lending market, decrying the strict regulation that went on in prime lending, which needed it less, while subprime lending became a free-for-all. Here is some of what the Washington Post reports on the situation:

Under a policy quietly formalized in 1998, the Fed refused to police lenders’ compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies. …

Banks and their subprime affiliates made loans under the same laws, but only the banks faced regular federal scrutiny. Under the policy, the Fed did not even investigate consumer complaints against the affiliates. …

“In the prime market, where we need supervision less, we have lots of it. In the subprime market, where we badly need supervision, a majority of loans are made with very little supervision,” former Fed Governor Edward M. Gramlich, a critic of the hands-off policy, wrote in 2007. “It is like a city with a murder law, but no cops on the beat.”

This information offers a rather interesting (and depressing) look at what went on in the years of the housing boom. Clearly, all of the money being made by the people that matter to the regulators was incentive enough to get them to turn a blind eye. And, while the borrowers who over-extended themselves do bear some of the blame, it is clear that this problem could have been averted to some extent if regulators had been doing their jobs.

In the end, while some reforms are certainly necessary to regulatory law, the biggest reform needed is for regulators to actually, well, regulate.

This is a pretty interesting video to watch. (Warning: There are a couple of swears. But no F-bomb.) At any rate, after this video began getting some serious views, her credit card issuer lowered her interest rate. It’s still an amusing video, and it brings up some interesting points about what credit card issuers are allowed to do right now.

Happy Friday!

Right now, the bottom tier of the housing market is heating up. Low-cost homes are selling faster as the housing market stabilizes and as people look for good deals. This is also the segment of the housing market popular with investors, so it can be difficult to compete if you are looking for a good deal. And the key, if you are looking at the bottom of the housing market, is to move fast. CNN Money reports on what buyers need to do to land a deal:

See homes the first day they’re listed, and if there’s one you want, submit an offer immediately, says Phoenix realtor Susan Ramsey. Don’t expect a deep discount; prices for lower-end homes are stabilizing. Put down 20% or more, if you can, to compete with cash-rich investors. Offer not accepted? Check in with the seller’s agent a few more times; many deals fall through.

First time home buyers in a good position are the most likely to benefit, since they also have an $8,000 tax credit they can use. The good news is that this $8,000 credit is immediate, and can be used as part of your down payment. Look around for state programs as well, since you could get even more money to help you out.

Mortgage interest rates have been a bit volatile lately. They have been rising and falling from week to week, changing as the outlook does. This week, though, there are lower mortgage interest rates, and that is leading to an upsurge in mortgage applications. On top the lower mortgage rates, government programs are helping. On the refinancing front, Making Home Affordable is getting more attention, and, of course, there is the first time home buyer tax credit. Mortgage News Daily offers this look at last week’s mortgage applications:

The Mortgage Bankers Association said the average mortgage rate fell to 4.97% in the week ending September 18. That, in combination with the $8,000 tax credit for first-time home purchasers expiring at the end of November, helped the mortgage loan application index expand by 12.8% in the week.

Clearly, even with home prices heading a bit higher, there is still great demand for buying. This is not much of a surprise, since even with rising prices, there are still great deals to be found, since home values are near the bottom during this recession. People are finally seeing that the recession is coming to an end, and that government programs won’t last forever. As a result, they are moving on opportunities to become home buyers.

Home prices continue their upward trend, gaining by 0.3%. Even though this is less than the 0.5% expected by many analysts, this is still encouraging in some circles. The idea that home prices are continuing to rise is providing some with the optimistic view that the housing market has bottomed out, and is ready to make some solid improvement.

Mortgage market news has been generally improving, as people rush to take advantage of the first time home buyer tax credit. Additionally, there has been an increase in buyers looking to benefit from the bargains found in buying distressed homes. There are a number of great deals out there, even as home prices increase.

If you have been waiting to buy until the bottom of the housing market, you have most likely missed your chance. However, it is still possible to score a great deal on buying a home, especially since mortgage interest rates are also quite low.

The 30-year fixed mortgage rate has bounced back to 5%, and appears to be heading higher — at least for now. For the most part, it appears as though mortgage interest rates will be settling into the range around 5% for quite some time to come. However, it could be that mortgage interest rates move lower in the future, depending on what happens to 10-year Treasury yields. Subprime Blogger reports on the effect Treasury yields could have on mortgage interest rates:

The 10 year treasury rate yield continues its down trend which is very good news for lower mortgage rates.  The 50 day moving average is now trending down which means that it will serve as overhead resistance any time there is a bounce or a short term rally.  The 10 year yield is actually rather close to its 50 dma currently.  It will be interesting to see if there is a move lower after the yield hits the average.  If the move is down, look for mortgage rates to test all time lows.

In the end, though, mortgage rates are rather low, irregardless of whether you happen to lock in your rate at a low. If you can afford a home, it is a great time to buy. And if you want to refinance, it is a great time to get a lower mortgage rate.

I can’t get enough of the ETrade Baby. As far as I’m concerned, the marketing people at ETrade (or whatever company they hire to do it) are geniuses. Enjoy this golf-related ETrade video.

Happy Friday!

U.S. housing starts are increasing, with the numbers from August in and showing that they are higher. Indeed, this represents a sharp turnaround from the state of affairs earlier this year in the U.S. The Financial Times reports on last month’s housing data:

Thursday’s data continue a sharp turnround for residential construction and signal that the stricken residential real estate market may have bottomed out. In April, new construction fell to a 50-year low but has since surged by 25 per cent.

Many economists, however, see the monthly rise as a mixed blessing. Some argue that renewed building activity is a sign of health in the housing market and the wider economy, but others contend that the overhang of housing inventory needs to be slashed for a recovery to occur.

Of course, there is still a great deal of inventory out there. My husband has been complaining about new building in our subdivision — even though there are still several existing homes available for sale. The economists concerned about this state of affairs have a good point. Until inventory is low enough that there is true demand for more new housing, the recovery is not likely to take place.

The housing starts data, though, does help support Ben Bernanke’s assertion that the recession has ended. There will still be a long road to recovery, but at least things are getting started.