Real-Estate Nightmare Looms for Retirees
Five short years ago, many learned men and women warned Americans against thinking that rising home prices would eliminate or lessen the need for them to save for retirement. Institutions and advisers alike warned people against relying on the equity in their homes to finance part if not all of their consumption needs in retirement.
Today, that's no longer the case. In fact, today, we have almost the opposite situation. With home prices falling for nearly five years, many Americans now must consider what to do with their homes should prices continue to collapse and the equity in their homes -- if they are still lucky enough to have any equity -- disappears completely.
Why it pays to shop around for mortgages
As soon as you think mortgage rates couldn’t get any lower, fixed-rate mortgages hit another record low this week, according to Freddie Mac’s weekly survey of conforming mortgage rates.
Thirty-year fixed-rate mortgages fell to a 4.01% average this week, flirting with breaking the 4% threshold, according to Freddie Mac. Fifteen-year fixed-rate mortgages also hit a record low at 3.28%.
But spreads between average rates and lowest rates are “at an all-time high,” Doug Lebda, chief executive of LendingTree, said in a news release this week. LendingTree is an online marketplace connecting consumers with lenders.
“We’re seeing about an 84 basis point difference between the average rate and lowest rates offered, the largest spread since LendingTree began tracking the data,” Lebda said. “That’s about a $125 difference in monthly mortgage payments on an average home loan, or $1,500 per year that borrowers could be saving on their mortgage payments.”
The average 30-year fixed-rate mortgage rate offered by lenders on LendingTree on Sept. 27, for example, was 4.34%, according to the release. Meanwhile, the lowest rate on the mortgage offered on the network was 3.5%.
Read More: http://www.marketwatch.com/story/why-it-pays-to-shop-around-for-mortgages-2011-09-30
Why would you buy a new home?
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Given the bloated supply of existing homes for sale, including a glut of foreclosures, there aren’t many people willing to shell out a premium price for a newly built house.
New-home sales dropped to a seasonally adjusted annualized rate of 295,000 in August, down from 323,000 for all of last year, and a far cry from 2005, when 1.28 million new homes were sold, according to the Census Bureau and the Department of Housing and Urban Development. Read more: Sales of new U.S. homes dip in August.
Hawaiian paradise becomes a ghost town
With the global economy in turmoil and real-estate wounds still festering across the country, there's trouble in paradise.
MORE HOME-BUYING ADVICE
• The top 10 most walkable cities
• 5 cities where home prices will rise this year
• Best cities to invest in rental homes
• Top 10 cities for foreclosures
• Top tricks to sell your home if all else fails
• Five red flags when buying short-sale homes
• The retirement houses of tomorrow
MORTGAGES
• Why you may end up in a cheaper house
• Refinancing window reopens for some
• New mortgage fees mean costlier loans
• A 15-year mortgage isn't for everyone
• Refinance in less than year? Maybe
• Can record low mortgage rates help you?
• Refinancing mistakes to avoid
HOME VIDEO
• Where small houses are big sellers
• Top 10 best places to live
• How to get your house a TV makeover
• Organize your small spaces
• Kitchens that make cooking fun
• Homes that help you as you age
• Dream kitchen on a budget
See the entire MarketWatch Guide to Real Estate
Still, buying new does have benefits.
Despite a likely higher price tag, a home builder will say that you’re buying a better product when you buy new. For one, it’s a home designed for the way Americans live today, maximizing the usability of space and offering amenities that speak to modern needs, such as big closets. Plus, new homes are built to be more energy efficient.
