Christmas

As we pause to spend a few days with our families during this Christmas Holiday season, we wish you and your family a safe and happy holiday filled with joy and thanksgiving. 

We'll be back on Thursday with more real estate news and tips. 

Thanks for sharing some of your precious time with us at this website this year.

Pending Home Sales Rise Unexpectedly

Pending sales of existing U.S. homes rose modestly in October, bucking Wall Street forecasts, but the decline from a year ago was the third largest on record, a reminder of just how far the housing market has fallen.

The National Association of Realtors reported recently that its Pending Home Sales Index, based on contracts signed in October, was up 0.6 percent at 87.2 from an upwardly revised index of 86.7 in September.

The forward-looking indicator of home sales was more upbeat than expected by economists, who had forecast a decline of 1.0 percent.

Still, the boost in pending sales was not enough to increase analysts' hopes for a housing recovery anytime soon.

Year-over-year, pending sales were down 18.4 percent, the third-largest drop since the trade group began keeping such records in January 2001.  Only the declines registered in August and September were deeper.

Existing home sales in 2008 should hit a pace of 5.70 million, compared with an expected 5.67 million this year.  The NAR said median home prices would likely fall 1.9 percent this year, but rise 0.3 percent in 2008 to $218,300.

This year's home price decline would be the first annual decline since the Great Depression.

Landlord Lessons

According to the National Association of Realtors, last year Americans bought nearly 2 million homes not to live in, but for investment.  Will all the new landlords be ready? 

Money reporter Stacy Johnson has some tips to make sure they are.

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What Interest Rate Cuts Mean to You

When the fed lowers interest rates and gets everyone all excited, what do these lower interest rates really mean to you and me?

Homeowners: You could save hundreds of dollars a month if your loan is pegged to Treasury rates, which have fallen considerably thanks to the Fed's recent cuts.  But many buyers in expensive areas resort to so-called jumbo loans, which are typically pegged to slower-moving indexes that remain elevated.

Borrowers: Several banks lowered their prime rate, which forms the foundation for car loans, home equity lines and other loans.  But you must carry a whopping $5,000 credit card balance to save just $12.50 annually from a quarter-point rate cut.

Consumers: Lower rates threaten to boost inflation and the price of imports.  So far, inflation has been held in check, and foreign companies generally are holding the line on prices.

Savers: Falling interest rates normally would whack rates on CDs and other savings.  But the cash crunch has spurred many banks to prop up such rates.

Travelers: International vacations and business trips cost more because the dollar has sagged in the wake of the Fed's cuts.  But it could be buoyed if other central banks trim rates.

So, before getting all excited about the Fed lowering interest rates again, stop and ask yourself, "What will an interest rate cut really mean to me?"  The answer will probably be, "Not much."

We'd love to hear your opinion about this if you'd like to leave a comment.  Click the "comment" link below to tell us what you think about interest rate cuts.

Help on the Way for Strapped Homeowners

The Senate moved against the worsening mortgage crisis, voting recently to make it easier for thousands of homeowners with ballooning interest rates to refinance into federally insured loans.

The legislation, approved 93-1, would allow the Federal Housing Administration to back refinanced loans for borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial "teaser" levels.

The bill also tries to make FHA loans more attractive than risky subprime loans by accepting lower down payments and expanding the eligibility for counseling for homeowners having difficult with their mortgage payments.

The Senate's proposed changes are especially important now, given the credit crisis that has made it much more difficult and more expensive for people to refinance or get financing to buy a home.  Private lenders have been reluctant to make new loans.

Allowing the federal government to insure more and bigger loans should help provide some relief and ease the credit crunch.

The Senate also passed legislation that would allow homeowners to receive mortgage forgiveness from their lender tax free. That's when a lender allows a homeowner not to pay a portion of their mortgage.

The IRS currently taxes any loan forgiveness as income. The tax forgiveness is available on mortgage indebtedness of up to $1 million.

What do you think?  Will this new legislation help the current state of the real estate market and/or the overall economy?  We'd love to hear your feedback.  Leave us your opinion by clicking on the "Comment" link below.