The Impact of Interest Rates on Home Sales

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Some potential homebuyers are sitting on the sidelines waiting for housing prices to hit bottom. It makes sense to buy a house at the lowest price possible but there are other critical considerations you need to keep in mind.

Waiting for the housing market to hit the bottom is always difficult and not always the smartest thing to do. While the market is propably not at the bottom yet, interest rates are at historic lows, and many homebuyers are failing to consider the savings that come with lower interest rates, particularly over the life of the loan, or even the partial life of the loan since you pay a huge part of the total interest in the first fiew years of the loan.

Mortgage rates are low right now because of the recession and large quantities of home foreclosures. In addition, the Federal Reserve has moved aggressively to push down mortgage rates by buying as much as $1.75 trillion of housing debt and Treasuries this year. This policy has been successful in lowering interest rates. Rates on 15-year and 30-year fixed-rate mortgages are hovering at historic lows right now.

What does this exactly mean for you, the home owner/buyer?

It means that on a 30-year fixed-rate loan amount of $200,000 at 5%, the interest paid over the life of the loan is $186,512. That brings the total loan payments to $386,512. At 6%, the amount of interest paid rises to $231,676, a 24% increase. At 7%, it’s $279,018, a 49% increase. The lesson you need to learn here is this: You need to keep in mind what really might be gained from a further drop in housing prices as compared to what could easily be lost by a rise in interest rates.

With regards to the market in it’s current state, let’s review some recent indicators. Pending home sales, a forward-looking indicator based on signed contracts, rose 6.7% in April, the biggest monthly jump since October 2001. Existing home sales rose 2.4% in May with some homes, once again, receiving multiple offers. Note that most of those were probably at below market value to begin with. Mean while the most recent Standard & Poor’s/Case-Shiller 20-city housing price index shows the month-to-month decline in housing prices has stalled from 2.8% in January to February, 2.2% in February to March and 0.6% in March to April. This has led many industry experts to anticipate that soon the decline in housing prices will bottom out.

If you have a house in mind and the savings in hand right now for a down payment, this might be a great opportunity to purchase a home. One the other hand if you don’t have the down payment in hand, then now is the time to add a home business income stream to your portfolio to get the cash you need… before the market reverses itself and you begin to start telling yourself… if only I had back when.

Click here to visit my website and learn how you can start your own personal home business for FREE with Free video training that takes you by the hand… step, by step:

www.SpidersMarketingWeb.com

Thanks for your time,

Wes Waddell
www.SpidersMarketingWeb.info

Construction of new homes and apartments jumped 17.2% in May to a seasonally adjusted annual rate of 532,000 units. The increase was led by a 62% rise in the construction of multifamily units. Construction of single-family homes rose 7.5% to an annual rate of 401,000, and building permits, seen as a good indicator of future activity, were up 4% to an annual rate of 518,000 in May.

The National Association of Home Builders/Wells Fargo housing market index fell one point in June to 15. An index reading below 50 indicates negative sentiment about the housing market.

The Labor Department reported the producer price index, which tracks wholesale prices, rose 0.2% in May, following a 0.3% increase in April. For the year, wholesale prices have dropped 5%, the biggest 12-month decline since 1949.

The Federal Reserve reported that industrial production at the nation’s factories, mines and utilities fell 1.1% in May, following a revised 0.7% decrease in April. Economists had expected a decline of 0.9% in May.

The Labor Department reported that consumer inflation rose a seasonally adjusted 0.1% in May. For the year, the consumer price index is down 1.3%, the biggest decline since 1950.

The Conference Board reported that its index of leading economic indicators rose 1.2% in May, following a revised 1.1% gain in April. It was the best back-to-back performance since November-December 2001. The index is designed to forecast economic activity in the next three to six months.

Initial claims for unemployment benefits rose by 3,000 to 608,000 in the week ending June 13 from a revised figure of 605,000 in the previous week. The number of people continuing to claim jobless benefits in the week ending May 30 fell 148,000 to 6.69 million. It was the largest drop since November 2001.

Upcoming on the economic calendar are reports on existing home sales on June 23, durable goods orders and new home sales on June 24, and consumer spending on June 26.

If you want to protect yourself and your family… Come see what we have FREE for you at:

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This could just solve all your financial worries.

Wes Waddell
www.SpidersMarketingWeb.info
www.SpidersMarketingWeb.com
www.Referals.ws

Hi fellow Entrepreneur,

Yes, the Obama administration said things would get better in March and April… but that is not what happened.  It wasn’t even close to what happened!

The National Association of Home Builders/Wells Fargo housing market index posted its biggest monthly jump in five years in April. The index rose five points to 14 and is the highest it’s been since October of 2008. The only problem with that is that it takes an index reading higher than 50 to indicate positive consumer sentiment about the housing market.  A score of 14 means that the housing industry is still in crash mode.

To prove it, here’s the other numbers that go with the Housing Index:

The Commerce Department reported that construction of new homes and apartments fell 10.8% in March to a seasonally adjusted annual rate of 510,000 units.  Obama administration economists had anticipated a decline to only 550,000 units.  The largest part of the decrease was due to a drop in multi-family units… the ones needed most in a poor economy.  Single-family construction was flat for the month of march.  But, since building permits fell another 9% to a seasonally adjusted pace of 513,000 units, you can look for that to fall again in April’s numbers.

The bad news continued for the Obama administration.

On Tuesday, April 14, the Labor Department reported that the producer price index, which tracks wholesale prices, fell by 1.2% in March.  This time the drop was largely due to a 5.5% decrease in the cost of energy goods. Economists had expected only a 0.1% decline; so the news, while good for the consumer in the short term, was very bad for the state of the economy and any hope of a quick recovery.

Continuing the bad news, the Commerce Department reported that retail sales dropped 1.1% in March compared to a newly revised 0.3% increase in February.  It was the biggest decline in three months.  Obama administration economists had anticipated retail sales to actually rise 0.3% in March.

Following the downward trend, the Commerce Department also reported that total business inventory decreased 1.3% in February. This was the sixth straight month that factories, retailers and wholesalers sought to cut their inventory.  Another good sign that things are only getting worse… wouldn’t you say?

The Labor Department seemed to agree and reported Wednesday that consumer prices fell another 0.1% in March after increasing 0.4% in February.  As seems the trend, the Obama administration economists had expected the Consumer Price Index to rise 0.1%… total oposite of what it did.  When we compare this to a year ago when consumer prices fell 0.4%, This is the first 12-month continuous decline since 1955.

The Federal Reserve reported Wednesday that industrial production at the nation’s factories, mines and utilities fell a seasonally adjusted 1.5% in March. This too was the fifth straight monthly decline and much larger than the 1% decrease our government economists had expected.

Upcoming on the economic calendar are reports on the index of leading economic indicators on April 20, existing home sales on April 23 and new home sales on April 24.

Are you seeing a wishful trend by the Obama administration? 

Even so, am I worried?

NO!

Should you be worried?

That depends…

If your life depends on a J.O.B., then yes you have a lot to worry about.  It’s very apparent to even those that are not in the know that the economy is not going to get better any time soon and that there are going to be a lot more layoffs and bankrupt companies still to come before things begin to improve.

If you are totally dependent on someone else for your job and your income, then you are not safe and your nights of worry are going to continue for some time in the future.

On the other hand, if you have your own home business for part or all of your income… then you have little to worry about and have nothing but success in your future.

You see, it’s precisely in these troubled times when the individual home business is the most successful and has the largest growth in history. This is where the little guy can literally control the world.

See what I mean by checking out the totally FREE Home Business training videos and multi-income stream system at:

www.SpidersMarketingWeb.com

You’ll rule the day when you do!

The Commerce Department reported total construction spending fell 0.9%
in February. It was the fifth consecutive monthly decline but much
less than the 1.8% decrease economists had anticipated.

On Friday, the Labor Department reported that the nation’s unemployment
rate increased to 8.5% in March from 8.1% in February. Businesses cut
663,000 jobs in March. This is the nation’s highest unemployment rate
since November of 1983.

Let’s face it… the only safe job these days is the one where you are SELF EMPLOYED running your own Home Business.

Get started today for FREE at: www.SpidersMarketingWeb.com

The FREE Home Business Internet Video Training Site.

Good News for Housing… Still Bad Most Everywhere Else.

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The Commerce Department reported that housing starts unexpectedly jumped 22.2% in February to a seasonally adjusted annual rate of 583,000 units. This ended the longest streak of declines in 18 years. Economists had anticipated a 3.4% decline to 450,000 units. Leading the surge was an 82% increase in the building of multifamily homes — condominiums, apartments and townhouses — to 226,000 units in February from 124,000 in January. Housing starts for single-family homes rose 1.1% to 357,000 units. Building permits for single-family homes climbed 11% in February to 373,000, compared to 336,000 in January.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending March 13 increased 21.2% to 876.9 from the previous week. Purchase volume rose 1.5% to 257.1, while refinancing applications jumped 29.6% to 4,497.6.

The Federal Reserve reported that industrial activity at the nation’s factories, mines and utilities fell by 1.4% in February. Economists had expected a decline of 1.2%. The factory-operating rate was down to 67.4% of capacity in February, the lowest level on records dating back to 1948. On a positive note, motor vehicle and parts production rose 10.2% after four consecutive months of declines.

The National Association of Home Builders/Wells Fargo housing market index in March stood at nine, the same level it was in February. The index hit a record low of eight in January. An index reading higher than 50 indicates positive sentiment about the housing market. The index has been below 50 since May 2006, and below 20 since April 2008.

On Tuesday, March 17, the Labor Department reported the producer price index, which tracks wholesale prices, rose 0.1% in February. Economists had expected a 0.8% increase.

The Labor Department reported Wednesday that consumer inflation rose 0.4% in February, the biggest one-month jump since a 0.7% rise in July 2008. The increase was largely due to an 8.3% rise in gasoline prices.

The Conference Board reported Thursday that its index of leading economic indicators fell 0.4% in February. That was slightly better than the 0.6% decline economists had expected. The index is designed to forecast economic activity in the next three to six months.

Upcoming on the economic calendar are reports on existing home sales on March 23, and durable goods orders and new home sales on March 25.

Let’s face it, if you don’t have your own Home Business going that takes full advantage of the legal tax breaks and helps offset the falls and shutdowns taking place in the global economy…

Then you have no security and you are giving $1000′s back to the government that is rightfully yours.

Start your own real (legally tax deductable) FREE Multi-Income Home business right now – Complete with online video training at:

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Isn’t it time you took control of your own destiny?

www.SpidersMarketingWeb.com

Get started now!

Wes Waddell

www.SpidersMarketingWeb.info (BLOG)

Hi Spiders Marketing friend,

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Enjoy!

Wes

www.Referals.ws
www.SpidersMarketingWeb.com
28115 N. Spotted Rd.
Deer Park, WA  99006