• Low Mortgage Rates—Mortgage rates continue to hover at 50-year lows – 5% and even 4.75% for 30-year mortgages, and still lower for 15- and 20-year mortgage terms.

• Improvement in Oil Prices—We’re all paying a lot less at the gas pump, and seeing sharply discounted prices on retail goods and autos.

• Saving Money—Americans are actually saving again, the national savings rate took a nearly 3% jump last month. That might sound small, but it’s hugely important if it is the start of a trend.

• Action on Capitol Hill—The incoming Obama administration is expected to introduce a massive economic stimulus package early in 2009. A resulting improvement in the employment picture and available credit can help restore consumer confidence and spike a surge in economic activity.

• Coming Price Stabilization—Some economists are expecting housing prices to stabilize and/or rise (in 2009) after a likely boom in mortgage refinancing as rates fall and loan applications increase. There are signs that housing prices are stabilizing in some parts of the country. The latest monthly Federal Housing Finance Agency index found home prices up by 0.6% in the Mountain states and by 0.2% in New England.

* All down-cycles tail come to an end. Keep your eyes open for the small positive signs that are accumulating out there.

Your Chance at Home Ownership through a Lease Purchase Option!

• Asking $139,500.00
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So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have – which some tend to forget is always on the table when these negotiations start up again – mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.
While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again.

*Supplied by the NAR… Looks like it is time for buyers and sellers to get busy! Yeah!

Thanks,
Laura Wunder

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