REPOST: Mortgage rates creep down toward 4%

This year seems to favor us all as mortgage rates continue to get better going down by 0.3% since the beginning of the New Year. Read this article from CNN for more of the issue.

 

Image Source: money.cnn.com

Maybe the days of rock-bottom mortgage interest rates aren't numbered, after all. Once again, rates are creeping down towards 4%.

Rates dropped 0.09 percentage point this week to 4.23% for a 30-year, fixed -rate home loan, according to the latest weekly report from Freddie Mac.

Mortgage rates started the year at 4.53%, and have sunk each week in 2014, falling a total of 0.3 percentage point.

Borrowers with a 4.23% mortgage would pay $982 a month on a $200,000 balance, compared with $1,017 on a 4.53% loan.

Frank Nothaft, Freddie Mac's chief economist, attributed the move to cooling home sales.
 
"Mortgage rates fell further this week following the release of weaker housing data," he said. "The pending home sales index fell 8.7% in December to its lowest level since October 2011."

The drop in mortgage bond purchases by the Federal Reserve, the so-called taper, that started last month, was expected to push rates gradually higher.


But worrisome economic news and a plunge in stocks has counter balanced the Fed action, according to Keith Gumbinger of HSH.com, a mortgage information company. Anxious investors have scurried to safe havens like treasury bonds and mortgage backed securities.

"Much to the benefit of mortgage shoppers, this move [to bonds] is dragging down yields and mortgage rates," said Gumbinger. "This is a nice surprise" for people looking to purchase or refinance their homes in a rising rates environment, he said.

Rates may keep dropping, according to Gumbinger.

"The reduction in Fed support, slowing manufacturing activity here and in China, some less-than-stellar figures on consumer spending, housing, and more are causing some concern that the economy has decelerated over the last couple of months," he said.

"The economy doesn't need to slow very much to put us back into the kind of funk we've been hoping to escape since the recovery began several years ago."

  
Tyler Rytima is a real estate agent from Sacramento, CA. Follow this Google page for more articles about mortgages and real estate.

REPOST: American millionaires lag world in real estate

American millionaires hold a smaller share of real estate compared to their European and Asian counterparts. Why is this so? Read CNBC's full report below. 

(Tooga | Stone | Getty Images) Image Source: cnbc.com

American millionaires may love real estate. But not as much as their European or Asian peers.

A new report shows that American multimillionaires—those worth $30 million or more—hold 7 percent of their wealth in personal real estate, according to a report from London real estate firm Savills and researcher Wealth-X.

European multimillionaires hold more than four times as much, with real estate accounting for 31 percent of their fortunes. Asian multimillionaires have 27 percent of their fortunes in real estate. Combined, Asians and Europeans hold more than a third of the residential real estate owned by multimillionaires worldwide.

Video Source: cnbc.com

In fact, North America ranked last among the world's regions when it comes to real estate holdings of the rich.

Paul Tostevin, of Savills' world research team, said the American rich have more of their wealth in financial investments and stocks than their global peers.

"I think in the U.S. there's more integration with the investment culture, and use of the stock market is more advanced," he said. "So real estate is a smaller share."

Real estate in the U.S. is also much cheaper than real estate in other parts of the world, he said. While Americans may see penthouse prices in Manhattan as outrageous, they are a good value compared with high-end pads in London, Hong Kong and other global wealth centers.

The average value of property held by North American multimillionaires—at slightly more than $500,000—is less than a third of the value of properties held by the rich in Europe or Asia.

"New York looks like good value on the world stage," Tostevin said. "That's part of the reason it's so appealing to overseas buyers right now."


Tyler Rytima is a real estate agent from Sacramento, CA. Follow this Google page for more real estate news.