The year started with the easy passing of Y2K (remember that? lol) and increased activity in the housing market. The 30-year fixed mortgage rate also surpassed 8%, the highest in over the three preceding years. Activity started to heat up later in Q1 and rates also simmered a bit. The outlook looked great for new and resale home sales. Rates continued to fluctuate through the year between 8% to 8.25%, in the face of inflationary concerns. Nevertheless, the year continues to seesaw with rate and home sale fluctuations. Finally, the year ended with rates down, at 7.35%.
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January, 2000
Welcome to the January edition of the Home Buyer’s Information Newsletter. Y2K has seemingly come and gone (see note below) and there appears to be a jump in housing activity early in the month when compared to the final weeks of 1999. This may be a response from buyers who have some concern about the future trend of mortgage rates (see the mortgage rate update below).
Mortgage Rate Update
Good News and Bad News
The good news involves the overall effect of Y2K problems: Virtually none. The bad news is that with little economic impact expected from Y2K, the economy continues to gain steam, which means current—and future—interest rate pressure. In the first week of January, U.S. 30 year fixed rates were in the 8.1% range (with 1 point), the highest in over 3 years. In Canada, 3 year closed fixed rates were averaging close to 8.3%.
The future? A cloudy crystal ball. The Federal Reserve
Board meets the first week of February, and almost everyone expects some sort of a rate hike. Although this action will not have a direct effect on long-term mortgages, it sends a signal that almost always has a ripple effect on all rates. The jury is still out, however, on many other indicators that directly influence mortgage rates.
If you have been sitting on the fence waiting for a rate softening, now may be the time to do your preparation work so that you can lock-in quickly if necessary. Knowing the best day of the week to lock-in a mortgage rate can also save you money. If rates do soften, you will be ready, especially if the situation is short-lived. If they continue to rise, you can secure your rate before too much damage is done.
Additional mortgage information, hints and questions
Site Update
Good News and Bad News, Part II
The good news is that on January 9 we moved the Home Buyer’s Information Center to new higher capacity and faster servers. The bad news (although temporary) is that even though the addresses of the site have not changed, it takes the Internet a little time to update its “road map”—meaning that some users may have difficulty accessing the site for a short amount of time. We felt that, although it may mean brief outages, it will allow us to continue to add more features and content to the site as well as making it quicker to use.
First Time Buyers
If you are in the process of buying your first home, don’t forget the section devoted to topics of specific interest to first time home buyers.
February, 2000
Welcome to the February edition of the Home Buyer’s Information Newsletter. It is beginning to look as though there will be an early jump on the spring home market again this year, as many areas of the U.S. and Canada are beginning to see activity that normally does not begin until early to mid-March. In most areas, housing inventory is at reasonable levels, meaning buyers have a decent range of choices, an advantage compared to the situation that existed in much of 1999.
Mortgage Rate Update
Up and Down…
But mostly up. Rates continued a slow but steady rise in late January and early February. Though the net increase has not been budget-breaking for most home buyers, the trend—even with some up and down weekly variations—has been in an upward direction. Early February averages in the U.S. have been in the 8.15% range for 30 year fixed mortgages. In Canada, 3 year closed term rates have been in the 8.25% range.
Some analysts are predicting a bit more stability in the coming months while others are looking for some additional small increases. Not many, though, are projecting any substantial decreases in rates.
Recent Site Updates
Setting a Value on a Home
Visitors to the Home Buyer’s Information Center often ask about making offers on homes. Questions we hear often are “How much is a fair offer?” and “How far below the listing price is a good place to begin negotiation?” To make an intelligent offer—and one that is more likely to be accepted—it is important to know the components of house pricing determinations. We’ve added a new section on how to value a home when making a fair offer.
March, 2000
Welcome to the March edition of the Home Buyer’s Information Newsletter. Spring has definitely arrived in many parts of the U.S. and Canada, both in the temperature as well as the activity in the Real Estate market. Although there was a slight decline in sales levels early in the year, the overall outlook for the year 2000 is still for one of the best years ever in overall sales. More activity in the market generally equates with more choices and availability for the buyer.
Mortgage Rate Update
Some Relief at Last!
After a steady trend upward, mortgage rates have retreated just a bit in early March, with 30 year fixed rates just over the 8.00% mark. In Canada, 3 year closed term rates were in the 8.15% range. Both rates are a decrease from levels earlier in the year.
Many analysts forecast a see-sawing of rates—up a little one week and down a bit the next—in the short term, unless there is an onrush of good (or bad) economic news. In such an environment, comparisons of available mortgages are extremely important.
Recent Site Updates
Choosing a Mortgage
The volume of mortgages available can sometimes be bewildering, so we have added a section dealing with the basic choices—and pros and cons.
Mortgage Comparisons
We have also added a printable page where you can keep track of up to 4 different mortgage offers including contact information, rates, points, etc.
Canadian Mortgages
Although much of the information on the Home Buyer’s Information Center is applicable in Canada, there are some basic differences in the structure of Canadian mortgages.
April, 2000
Welcome to the April edition of the Home Buyer’s Information Newsletter. We are entering what is traditionally the most active time of the annual housing market, the spring and early summer, which generally means higher inventory levels (more homes from which to choose) as well as higher levels of buyer activity. You may find more competition, but you will also have more choices. Keep in mind that at this time of the year the old adage holds even more true: Good homes priced correctly sell quickly while the overpriced and less desirable homes sit on the market.
Mortgage Rate Update
A Breather?
Mortgage rates showed a tiny bit of softening in early April, with 30 year fixed rates averaging at just about the 8.00% level. This may be a temporary breather, though, with the prospect for interest rates In general—especially short term rates—tending toward the upward movement. Economic figures released on April 13 and 14 indicate that inflationary pressures are still very alive, raising the prospects for the Fed boosting rates when they meet in May.
Recent Site Updates
Housing Needs and Wants Scorecard
A number of users have asked for a printable sheet where they can make notations of items that they need in a home and compare how an individual home matches up. You can find it at: Needs and Wants Scorecard.
May, 2000
Welcome to the May edition of the Home Buyer’s Information Newsletter. It certainly has been an active month, with the stock market and interest rates doing daily gyrations. What bearing will this have on the home buying process? It is a sign that all is not perfect with the economy, which means that you should be mindful of some important considerations when buying a home. We’ve devoted much of this month’s issue to ways to be effective in the type of market we are now experiencing.
Mortgage Rate Update
Bumpy Road Ahead?
After several months of only moderate rate fluctuation, late April and early May have seen the trend in mortgage rates heading only one way: up. 30 year fixed rates in the U.S. were in the 8.25% range, up about .25% from only a few weeks earlier. Rates may or may not continue their strong march upward, but virtually no one is predicting an easing in rates.
Many experts forecast the trend toward higher rates to continue for much of the current year. If you have been holding off buying a home, waiting for the rate situation to improve, your window of opportunity may be quite limited.
Recent Site Updates
Buying a House When You Have Credit Problems
Many buyers find themselves needing or wanting to own a home but hampered by their credit history. We’ve added some hints and tips on dealing with past and current problems.
June, 2000
Welcome to the June edition of the Home Buyer’s Information Newsletter. Late May and early June have found a bit of softening in the Real Estate market in many areas of the U.S. and Canada both in resale and new homes, largely due to the previous increases in mortgage interest rates. With many areas having available housing inventory and with rates easing a bit (see the next story), this may well be the best time thus far this year to be looking for a home.
Mortgage Rate Update
Although it may not have been dramatic, there has been a bit of easing in mortgage rates in the early June period, with U.S. average rates falling to the 8.00% range, down about 1/4 point since the previous reporting period. In Canada, 3 year closed term rates have been averaging in the 8.30% range, also reflecting a small decrease.
Although there are a few conflicting messages, it appears that there is some evidence that the economy is slowing a bit, lessening inflation worries and putting less pressure on both short-term and long-term interest rates.
Recent Site Updates
Mortgage Section Redesigned
We have redesigned the Mortgage Section of the site with links to all mortgage content and information from a single location.
July, 2000
Welcome to the July edition of the Home Buyer’s Information Newsletter. Although mid-summer is often a quiet time on the homebuying front, this year appears to be a little different, with activity level remaining at a reasonably strong pace, due mainly to the stability, at least for now, in the mortgage market (see next story). Housing inventory shortages are not as common as they have been and bidding wars have subsided a bit in some areas, but quality homes that are reasonably priced are still selling quickly.
Mortgage Rate Update
More Stability
We’ve now seen nearly 2 months without a large swing in mortgage interest rates (an unusual occurrence recently!) 30 year fixed rates in the U.S. are fairly stable in the 8% range. In Canada, 3 year fixed rates are generally in the 8.10% range. Most analysts see this stability being maintained until the next Federal Reserve Board meeting, on August 22, barring any negative economic news prior to that time. Although this may give buyers a bit of breathing room, it is wise to keep an eye on the situation, since those factors that affect mortgage interest rates can change very quickly (as we have seen several times in the last year or so).
For more information on mortgages, visit the recently expanded Mortgage Section.
Recent Site Updates
Dealing With Rate Increases
Although the current mortgage market is reasonably stable, this has not always been the case this year, where volatility has ruled. This is a situation that will likely return in the future. You can get some hints and tips on dealing with rising interest rates on the site.
August, 2000
Welcome to the August edition of the Home Buyer’s Information Newsletter. So far this summer, home buying activity has been quite a bit stronger than had been forecast. New home sales were down a bit, but sales of existing homes continue to be stronger than anticipated. Although interest rates are still higher than they were a year ago, they have stabilized recently and many buyers have decided to make a move now, rather than to wait and run the risk of facing rates on an upswing.
Mortgage Rate Update
Steady as She Goes
Early August has found rates for 30 year fixed mortgages steady in the 8% range or a bit less. This is good news for those that have been in a wait-and-see mode, but we have seen reports from a number of analysts who are recommending that now is a good time to lock in. Plus, we have seen no evidence of stabilization in housing market prices (they keep headed in one direction–up) which means that even if there is a bit of savings in interest rate, all of that and more could be given back in price increases. You can always refinance a mortgage if rates go down, but if you pay more for a home because of waiting, that money is gone forever! For more information on mortgages, visit the Mortgage Section.
Recent Site Updates
Search Function
As the Home Buyer’s Information Center continues to grow, the amount of information available increases. With this in mind, we have added a search function on the home page. Hint: For best results, when you are searching for a concept (for example “closing costs” use quotes (“ ”) in your search. You can always find out “Whats New” at the Home Buyer’s Information Center.
September, 2000
Welcome to the September edition of the Home Buyer’s Information Newsletter. It definitely has been an up and down year for the Real Estate market, with both existing home sales and new home sales see-sawing, up one month and down the next. In addition, some areas that were experiencing very strong market conditions earlier in the year have quieted just a bit, which is a positive development from a buyer’s perspective since it has become a bit less of a seller’s market (higher prices and quicker sales) and more a buyer’s market (more opportunity for some negotiation).
Mortgage Rate Update
More Stability
We’ve now seen nearly 2 months of reasonably stable mortgage rates—a rare situation in the last year when rates have been extremely volatile. In general, 30 year fixed rates have remained under the 8% mark and 15 year fixed rates below 7.75% Will the stability continue? Much is dependent on the rate of inflation, which has been moderate at best. Oil prices and supply will likely have a big effect on the inflation picture in the coming months which could be bad news for many pricing levels. Should there be evidence that a higher level of inflation has returned, look for mortgage rate increases to follow shortly afterward.
Recent Site Updates
Good Faith Estimate
Shortly after you apply for a mortgage, your lender will supply you with a “Good Faith Estimate” which is an estimate of the closing costs associated with buying your home. We’ve added an example of the form to the site.
October, 2000
Welcome to the October edition of the Home Buyer’s Information Newsletter. Unlike autumns in previous years, we have found the level of homebuying activity to be only slightly down from the rather active pace of the spring and summer. Except for a few areas in the U.S. and Canada, though, we are not finding the inventory shortages that we saw previously. In most areas, you will have a reasonable number of homes to consider and the bidding wars that marked many negotiations earlier in the year have subsided a good bit. This is good news for home buyers, not so good news for home sellers.
Mortgage Rate Update
Window of Opportunity?
With 30 year fixed rates camped under 8.00% throughout September and so far in October, this may be an opportunity to apply and lock in a mortgage. Of course there is never a guarantee that rates won’t fall further, but with a number of “questions'” on the horizon—economic data and a Presidential election as examples—the current stability may not last. If you are saving money for additional down payment funds, now may be the time to assess your situation to see if the down-payment on hand and the mortgage payments available are a good “fit.”
December, 2000
Welcome to the Nov/Dec edition of the Home Buyer’s Information Newsletter. A number of factors, including the Presidential election and the approaching holiday season among them, have combined to slow activity in the Real Estate market in the last month. We’ve noticed a perceptible decrease in activity, both among buyers as well as the number of new listings hitting the market. Although a favorable interest rate environment may help with a recovery, it may be until after the first of next year until we see more movement in the market. In addition, it appears that the economy is heading toward a slowdown after the longest economic expansion in history. As we have said in these Newsletters and on the web site for over 18 months, it is never a good idea to “overbuy” when you purchase a home because of the distinct possibility that things will not remain as they are now. Better to have a bit less home and be able to comfortably afford it than to stretch yourself to the limit and run the risk of finding yourself in a painful payment crunch!
Mortgage Rate Update
Rates Soften
Overall, mortgage rates have softened a bit in the last six weeks or so, with 30 year fixed rates now averaging in the 7.35% range, more evidence of a slowing economy. Although there may be some further lowering of long term rates, we’ve seen no evidence that a large decrease is in the cards. For more information on mortgages, visit the Mortgage Section at: Mortgage Information.