Early last week, a forecast from the Fed that inflation should remain low for the next couple of years moved mortgage rates lower. Inflation is enemy #1 for mortgage rates. The economic news later in the week was less favorable for mortgage rates, however. Strong earnings reports produced a rally in the stock market, which pushed mortgage rates higher. In the end, mortgage rates finished the week essentially unchanged.

In testimony before Congress on Tuesday, Fed Chairman Bernanke provided an update on the Fed's outlook for economic conditions. Of note, Bernanke predicted that inflation will not be a concern any time soon, which was good news for mortgage rates. While he expects economic growth to turn positive later this year, he suggested that the labor market may be weak for several years. As a result, the fed funds rate will likely remain near zero for "an extended period".

The June Existing Home Sales report contained positive news for the housing market. In June, Existing Home Sales rose for the third straight month, climbing 4%. The inventory of unsold existing homes fell to a 9.4-month supply from a 9.8-month supply in May. The national median home price rose 4% from May. According to the National Association of Realtors (NAR), home sales were helped by the first-time homebuyer tax credit and "historically high affordability conditions".

First-time homebuyers accounted for 29% of all transactions in June. We are down to just 4 months left of the federal housing tax credit. It would be a shock to the system if this credit were not to be extended. My guess is we will not here much talk about the extension until we get closer to the date. Until there is official notice from the Fed that it will be continued, one should act as if it will end on Dec 1^st as scheduled. Remind your buyers that they need to be CLOSED by Dec 1^st and not just under contract.

Rate Update:

30 yr fixed Conventional FHA VA – all are at 5.25%

30 yr fixed USDA is 5.0%

"With careful and detailed planning, one can win; with careless and less detailed planning, one cannot win. How much more certain is defeat if one does not plan at all! From the way planning is done beforehand, we can predict victory or defeat."

Michael J. Caputo

Bank of America Home Loans
MLO Sales Manager
Cell: (912) 658-1595
EFax: 866-425-2812
Michael.Caputo@bankofamerica.com

" We will always be a responsible lender and we will enable you to be a successful homeowner."

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• 4,170 sq. ft., 3 bath, 4 bdrm single story - MLS® $646,900

Ardsley Park, Savannah  -  Light & spacious Ardsley beauty on park. Estate sized fenced lot, gracious entrance hall, with fire place. Large rooms, gourmet kitchen, sun porch, library, living room, large formal dining room on main floor, large office.

Property information

Here's a link to the CountryWide web site that contains REO information:

http://www.countrywide.com/purchase/f_reo.asp

This was pulled from Realtor.org: 

The homebuyer tax credit is one of 10 key provisions of the American Recovery and Reinvestment Act signed by President Obama into law on Feb. 17, 2009.

The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not require repayment.  Most of the mechanics of the credit will be the same as under the 2008 rules:  the credit will be claimed on a tax return to reduce the purchaser's income tax liability.  If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

Chart Highlighting the Major Modifications to the First-Time Homebuyer Tax Credit> (PDF: 309K)

Frequently Asked Questions> (PDF: 483K)

Download the IRS First-Time Homebuyer Tax Credit Form 5405> (PDF: 257K)

NAR's Presentation: The 2009 First-Time Homebuyer Tax Credit>  (PDF: 319K)

NAR's Presentation: The 2009 First-Time Homebuyer Tax Credit>  
(PPT: 218K)

Latest News and Information

NAR Webinar: First-Time Homebuyer Tax Credit - April 28, 2009
In this webinar, you'll learn exactly how the first-time homebuyer tax credit works, and you'll hear about how you can build a marketing program around the incentive to reach prospective buyers.
Register for the webinar>

4/05/2009 - NAR Runs Printed Ads in Targeted Congressional Districts
On Sunday April 5th, NAR ran printed ads in select newspapers, thanking a specific group of Members of Congress for their leadership and efforts in passing the $8,000 first-time homebuyer tax credit.
Download a copy of the ad posted on the Maine Sunday Telegram> (PDF: 105K)

3/19/2009 - IRS Provides Filing Guidance on First Time Homebuyer Tax Credit
The IRS released additional information to help homebuyers understand the ways they can file to receive the homebuyer credit.
Read more>