How Mortgage Rates Compare

You’ve heard it all across the media. Interest rates are at historic lows. If you are new to the mortgage process, these figures and statements give you little frame of reference. Let's take a moment to look at where interest rates have been over the last few decades, and what today's rates really mean for homebuyers.


Interest rates are affected by a gamut of factors.

According to the Federal Reserve Bank of New York, "Lower interest rates make it easier for people to borrow in order to buy cars and homes. Purchases of homes, in turn, increase the demand for other items, such as furniture and appliances, thus providing an additional boost to the economy. Lower interest rates mean that consumers spend less on interest costs, leaving them with more of their income to spend on goods and services." And this is, after all, what you want people to do in a down economy. You want them to reinvigorate the economy with spending. The Fed continues, "If the rates that consumers and businesses have to pay to borrow rise too rapidly, however, spending may decline, leading to an economic slowdown." So, it is an intricate dance the powers that be must perform in order to steer the economy the best they can. They, namely the Federal Reserve and Banks, are seeking stable prices, high employment rates, and sustainable growth in the economy.

30 years ago, in 1980, when many first-time home buyers parents were making home purchases, Freddie Mac reports that the 30-year fixed rate mortgage hit a staggering 16.32 percent.

Let's compare that in relation to today's interest rate, averaging around 4.5 percent.

• In the most basic terms, a 30-year fixed-rate mortgage for $100,000 at 16.32% will cost you around $1,450 a month.

• For the same mortgage at a 4.5 percent rate, you'll be paying $580 a month.

The difference is astounding, and this is the main reason the media is shouting news about interest rates. If you are in the position to buy, now could very well be the time.

Santa Clara County Market Conditions

Here is a quick snapshot at the Santa Clara County Market Conditions. This will give you an idea of how Santa Clara County real estate is doing now vs last year. Please keep in mind that the real estate market is a matter of neighborhoods and houses. No two are the same. For complete information on a particular neighborhood or property give me a call and I can get you that information.

Prices have gone up Year-Over-Year
 

Single Family Homes:

• Prices for single-family, re-sale homes were up in August, year-over-year, for the eleventh month in a row. The median price rose 13.7%, while the average price was up 15.4%, reflecting a higher share of $1,000,000+ home sales
• Sales of single-family, re-sale homes continued to slide and were lower than the year before for the third straight month: -13.1%.
• Inventory was higher than last year for the second month in a row: 18.4%. 

Condos:

• Median price for condos was up 5.3% year-over-year. This is the tenth month in a row the median price has been higher than the year before. After nine straight months of year-over-year gains, the average prices for condos dropped 1.7%.
• Condo sales were up 0.4% compared to last August. 
• Inventory for condos was higher than the year before for the third month in a row: 40.9%.

Simple ways to make your home more energy efficient

In this economy everyone is looking for ways to save a little extra cash here and there. One way to help save on your gas and electric bill is to make your home more energy efficient.

Now that summer is coming to an end and the cold months are nearly upon us we wanted to share some ideas about how to make your house more energy efficient. As much as 60% of you energy bill can go to heating your house. Here are some tips to cut down on the amount of energy you are losing.

• Set your thermostat on the lowest comfortable setting and leave it alone. You will adjust to lower temperatures and possibly sleep better as well. 68 degrees is a comfortible temperature.
• Insulate and weatherize your home properly. This is not an easy task if you have an old house, but some little things you can do relatively cheaply are: Put plastic on your windows. Use form weather striping around your doors. Close off rooms that you are not using. Shut vents to rooms that you don't use.
• Close drapes or curtains at night and on cloudy days.
• When the sun is shining, open drapes to take advantage of the natural warmth.
• Keep windows on the south side of your house clean to maximize solar gain.
• Keep windows near the thermostat closed, or the furnace may think it is colder than it actually is.
• Keep doors and windows closed. This may sound obvious, but many children tend to leave the door open when they go outside to get firewood.
• Keep your filters clean and check them monthly in your furnace.
• Contact your local energy department to see if they offer a free audit.
• Caulk and weather strip around doors and windows.
• Close your chimney damper when the fireplace is not being used.

Here some other things you can do that require a little more money, time and effort.

• Check your attic to see how much insulation you have. R-30 or R-40 insulation is recommended.
• Install better windows and doors if you don't have storm windows.
• Install an automatic thermostats that adjust the heat to your schedule.
• Plant hedges or install fences to serve as wind breaks. Cold wind usually comes from the northeast.
• Install foam gaskets and plastic plugs in all electrical outlets and switches on outside walls.

List reference - thriftyfun.com 

California Law To Require Carbon Monoxide Detectors

In case you haven't heard...A new law was passed that will affect nearly every California homeowner. Senate Bill 183 requires carbon monoxide detectors be placed in all California dwelling units. They have set a deadline of July 1, 2011 for single family homes, and January 1, 2013 for all other dwelling units (multi-family, apartments, motels, etc.).

Carbon monoxide detectors are a wise precaution to have. According to the American Medical Association, carbon monoxide poisoning is the leading cause of accidental  poisoning deaths in the US.  The California Air Resources Board has determined that 30-40 "avoidable deaths", on average, occur in California each year due to unintentional carbon monoxide poisoning. Additionally this is the cause of 175-700 "avoidable" emergency room visits and hospitalization in the state.

So if you don't already have a carbon monoxide detector in your home, grab one next time you are shopping and install it. It's a smart thing to do, and soon, it will be the law.