FT.com - The core consumer price index was flat, defying expectations of a sharp rise following an increase of 0.1 per cent in October. The easing price pressures will be welcomed by the Federal Reserve, which is concerned about the risk to the US economy from higher inflation next year. The clear sign of cooling inflation takes the pressure off the Fed to consider intervening in credit markets. The easing is likely to shift the emphasis of debate within the Fed slightly more towards the risks of a slowdown in growth. The Fed expects moderate economic growth in the coming months as consumer demand continues to support the economy despite a slowdown in the housing and auto sectors. The three-month trend for inflation was also benign, as the annualized core CPI - which excludes volatile food and energy prices -fell below 2 per cent for the first time in a year to a rate of 1.6 per cent.
The three-month trend for headline inflation was the most muted in five years and suggests price pressures are cooling following an overall easing in energy prices in recent months.
Many economists beleive that this is the type of information which will guide the Fed to cut rates by .25% in Spring of 2007. Keep an eye out for the next Fed meeting to see if the laguage starts to change. This is the indicator that investors will be looking at to determine their next moves.
12.15.2006
12.14.2006
2007 Mortgage Insurance May Become Tax Deductible
Mortgage Insurance Tax Deduction (National Association of Texas Mortgage Bankers) -
Finally Congress does something this year to help property owners. Starting in 2007, the mortgage insurance that one pays on their mortgage loan will be a line item tax deduction. Clarification regarding the new law is below.
The 109th Congress closed its session late last week by passing a tax reform bill, which included a new provision that will provide a significant benefit to your consumers in 2007. H.R. 6111 introduces a new, one-year, itemized tax deduction for mortgage insurance premiums. This new legislation will allow taxpayers who itemize their deductions to take an additional deduction for mortgage insurance premiums paid after December 31, 2006.
Section 163(h)(3) of the Internal Revenue Code allows taxpayers to take a deduction for interest paid on acquisition or home equity indebtedness on the taxpayer’s qualified residence. H.R. 6111 amends Section 163(h)(3) to include language that allows taxpayers to treat mortgage insurance premiums as interest during the 2007 tax year. This treatment only applies to mortgage insurance contracts issued between January 1, 2007 and December 31, 2007, and is only available to taxpayers with an adjusted gross income of less than $110,000.
H.R. 6111 passed the House 367-45 and the Senate 79-9, and now awaits the President’s signature. The text of this bill is currently not available. Once the full text is released, NAMB will feature it in a future edition of News from NAMB.
If you have any questions, please contact: GovernmentAffairs@namb.org.
Finally Congress does something this year to help property owners. Starting in 2007, the mortgage insurance that one pays on their mortgage loan will be a line item tax deduction. Clarification regarding the new law is below.
The 109th Congress closed its session late last week by passing a tax reform bill, which included a new provision that will provide a significant benefit to your consumers in 2007. H.R. 6111 introduces a new, one-year, itemized tax deduction for mortgage insurance premiums. This new legislation will allow taxpayers who itemize their deductions to take an additional deduction for mortgage insurance premiums paid after December 31, 2006.
Section 163(h)(3) of the Internal Revenue Code allows taxpayers to take a deduction for interest paid on acquisition or home equity indebtedness on the taxpayer’s qualified residence. H.R. 6111 amends Section 163(h)(3) to include language that allows taxpayers to treat mortgage insurance premiums as interest during the 2007 tax year. This treatment only applies to mortgage insurance contracts issued between January 1, 2007 and December 31, 2007, and is only available to taxpayers with an adjusted gross income of less than $110,000.
H.R. 6111 passed the House 367-45 and the Senate 79-9, and now awaits the President’s signature. The text of this bill is currently not available. Once the full text is released, NAMB will feature it in a future edition of News from NAMB.
If you have any questions, please contact: GovernmentAffairs@namb.org.
11.28.2006
October 2006 Sizzles
AUSTIN (Austin American-Statesman, inman.com) – Central Texas’ housing market posted an October record for both single-family home sales and prices, as homes sold at the fastest pace ever for the month.
Although homes sold in October were on the market an average of 66 days compared with 58 days for homes sold in September, the Austin Board of Realtors’ latest Multiple Listing Service report said the number is still a record low for October.
In the South Austin area that includes neighborhoods such as Cherry Creek and Tanglewood Forest, active listings took about 18 days to sell.
Last month was the tenth consecutive month of year-over-year sales gains, with nearly 2,075 single-family homes sold, up 8 percent from the approximately 1,920 sales last year. October’s median price set a monthly record at $175,000, an increase of 9 percent from approximately $160,500 posted a year ago.
The number of new listings jumped 12 percent during the period to almost 3,075. The nearly 7,950 active listings at the end of October, although down from September, were up 4 percent from a year ago. Pending sales were up 19 percent to more than 2,400.
There are fewer homes selling for under $120,000 so far this year, down 6 percent or more compared with the same period a year earlier. Home sales in the $200,000 to $249,000 price range, however, are up 18 percent.
Austin's real estate market remains hot with no signs of cooling off. Looking at the Southwest Market it is easy to see how commercial leasing rates effect housing prices and availability. The Southwest market has seen a steady increase in commercial leasing rates in 2006 and the October results show the impact on that particular housing sector.
Although homes sold in October were on the market an average of 66 days compared with 58 days for homes sold in September, the Austin Board of Realtors’ latest Multiple Listing Service report said the number is still a record low for October.
In the South Austin area that includes neighborhoods such as Cherry Creek and Tanglewood Forest, active listings took about 18 days to sell.
Last month was the tenth consecutive month of year-over-year sales gains, with nearly 2,075 single-family homes sold, up 8 percent from the approximately 1,920 sales last year. October’s median price set a monthly record at $175,000, an increase of 9 percent from approximately $160,500 posted a year ago.
The number of new listings jumped 12 percent during the period to almost 3,075. The nearly 7,950 active listings at the end of October, although down from September, were up 4 percent from a year ago. Pending sales were up 19 percent to more than 2,400.
There are fewer homes selling for under $120,000 so far this year, down 6 percent or more compared with the same period a year earlier. Home sales in the $200,000 to $249,000 price range, however, are up 18 percent.
Austin's real estate market remains hot with no signs of cooling off. Looking at the Southwest Market it is easy to see how commercial leasing rates effect housing prices and availability. The Southwest market has seen a steady increase in commercial leasing rates in 2006 and the October results show the impact on that particular housing sector.
11.14.2006
Ice Cream Special
I found out something interesting today. During the winter months, Baskin Robbins offers $1 scoop nights on Tuesday nights between 6:00-10:00p.m. Baskin Robbins is a franchise and each store is independently operated, so not all stores may participate in this program. However, if you call a store near you, my hunch is that they will honor your request and offer you $1 scoops of ice cream. In my opinion, it's a great deal. That's nearly 1/2 off a typical scoop of ice cream. Anyway, use the information for what its worth and remember it's o.k. to have an occasional scoop of ice cream.
11.03.2006
"Best Little City in America"
If you think this was said about Austin, Texas, then you would be right. National Geographic Traveler touts Austin as the "Best Little City in America" in its November/December 2006 edition. In its highlights of Austin, National Geographic lists diverse population, endless music, eclectic shopping and regional cuisine as defining factors for its rating. I have to admit, Our BBQ and Mexican food joints are some of the best that I've experienced. This isn't the only National publication to discuss Austin.
In the November issue of Travel & Leisure en Espanol, the magazine names Austin "the secret jewel." The main focus of this article was on our Live Music as the unequivocal difference. Again, I have to agree. Where else can you go to an airport or a local supermarket to hear live music? With over 150 venues for live music, it is hard to find another city that can say, "We are the Live Music Capital of the world."
That's not all, in December's issue of Conde Nast Traveler, Austin will be featured in an article by Graham Boyton, a London based editor of the magazine. He will tell of his experience of South by Southwest and why he feels Austin is a great city to visit.
I must admit, I think Austin is a wonderful city and sometimes I take it for granted. When I hear the National Press rave about my city, I get that "Austin Proud" sense about me and I want to go out and experience more of this city. Not only do we have wonderful hotspots, restaurants, and live music venues, but we have great people and an outdoor environment that rivals some of the greatest cities in America. My perfect weekend: float the river, listen to Willie, endulge at Hula Hut and soak up all that is "Austin".
In the November issue of Travel & Leisure en Espanol, the magazine names Austin "the secret jewel." The main focus of this article was on our Live Music as the unequivocal difference. Again, I have to agree. Where else can you go to an airport or a local supermarket to hear live music? With over 150 venues for live music, it is hard to find another city that can say, "We are the Live Music Capital of the world."
That's not all, in December's issue of Conde Nast Traveler, Austin will be featured in an article by Graham Boyton, a London based editor of the magazine. He will tell of his experience of South by Southwest and why he feels Austin is a great city to visit.
I must admit, I think Austin is a wonderful city and sometimes I take it for granted. When I hear the National Press rave about my city, I get that "Austin Proud" sense about me and I want to go out and experience more of this city. Not only do we have wonderful hotspots, restaurants, and live music venues, but we have great people and an outdoor environment that rivals some of the greatest cities in America. My perfect weekend: float the river, listen to Willie, endulge at Hula Hut and soak up all that is "Austin".
11.02.2006
Interest Rate News
My, how a week makes a difference! Mortgage interest rates are nearing a low for the year. 30 year fixed rate loans are yet again below 6%. While tomorrow is a big day for economic news with the Jobs report due, investors have been very attracted to mortgage backed bonds over the past 4 days. This has led to a brief dip in mortgage interest rate bringing the 30 year fixed rate conventional mortgage below 6%. The big question remains; Will this continue?
The answer is, it is too early to tell for sure where mortgage bonds will find their comfort range. It appears that bonds are feeling both buying and selling pressure. The pressure to the buy side is that the national economy is showing signs of cooling and there is much anticipation that inflation can be held in check. The pressure to the sell side is that the economy has made a soft landing and there will likely be a run up coming in early 2007 which would once again raise major worries on the inflationary outlook. Usually when this occurs, the Fed is quick to act by raising short-term rates.
I get the feeling that all will rest upon the pending holiday sales season. If the economy is moving along at a moderate clip and retailers show profits compared to last year then we can anticipate that the economy is prospering moderately and inflation can be held in check. This would be great news for mortgage rates. Otherwise, all of the gains in the bond market could be given back with interest. This would ultimately cause rates to move higher and this reaction would be quick.
Bottom line, keep your eyes on inflation and jobs. Check this site for more upcoming information, and if you are on the fence about buying a house, jump now, the window may be closing after December!
The answer is, it is too early to tell for sure where mortgage bonds will find their comfort range. It appears that bonds are feeling both buying and selling pressure. The pressure to the buy side is that the national economy is showing signs of cooling and there is much anticipation that inflation can be held in check. The pressure to the sell side is that the economy has made a soft landing and there will likely be a run up coming in early 2007 which would once again raise major worries on the inflationary outlook. Usually when this occurs, the Fed is quick to act by raising short-term rates.
I get the feeling that all will rest upon the pending holiday sales season. If the economy is moving along at a moderate clip and retailers show profits compared to last year then we can anticipate that the economy is prospering moderately and inflation can be held in check. This would be great news for mortgage rates. Otherwise, all of the gains in the bond market could be given back with interest. This would ultimately cause rates to move higher and this reaction would be quick.
Bottom line, keep your eyes on inflation and jobs. Check this site for more upcoming information, and if you are on the fence about buying a house, jump now, the window may be closing after December!
10.26.2006
Oct. 25th FED Meeting
As expected, the FED held the Federal Funds rate unchanged at 5.25% for the third time in a row. The FED's seemingly lack of tough discussions on inflation has spurred confidence in the bond market that the FED will continue to leave rates untouched for some time to come. While inflation is the most heavily weighted measure of economic stability, there is growing confidence that past rate hikes will continue to add pressure to the latest inflationary numbers and hopes that inflation will fall to a more comfortable target of 2-3% over the coming months.
What does this mean for mortgage interest rates?
If investors feel that the FED will leave rates unchanged and inflation can be held in check, then mortgage backed bonds will continue to be attractive. Thus, mortgage interest rates in the near term will remain level if not see a small drop. Housing sales will remain strong while some areas in the country will continue to see a decline in housing prices. Lower rates and cheaper housing is a good recipe for continued strength in the housing market.
How does this apply to Austin?
Housing prices in Austin have not seen the recent declines that the rest of the country is experiencing. Our market continues to see a rise in sales and thus in prices. However, lower interest rates will continue to impact sales regardless of the rising prices. If interest rates decline over the next few weeks there will be an increasing opportunity for buyers to pull the trigger. Nonetheless, there appears to be no end in sight for the booming housing market for Austin.
What does this mean for mortgage interest rates?
If investors feel that the FED will leave rates unchanged and inflation can be held in check, then mortgage backed bonds will continue to be attractive. Thus, mortgage interest rates in the near term will remain level if not see a small drop. Housing sales will remain strong while some areas in the country will continue to see a decline in housing prices. Lower rates and cheaper housing is a good recipe for continued strength in the housing market.
How does this apply to Austin?
Housing prices in Austin have not seen the recent declines that the rest of the country is experiencing. Our market continues to see a rise in sales and thus in prices. However, lower interest rates will continue to impact sales regardless of the rising prices. If interest rates decline over the next few weeks there will be an increasing opportunity for buyers to pull the trigger. Nonetheless, there appears to be no end in sight for the booming housing market for Austin.
10.24.2006
Austin Housing - Hot, Hot, Hot
The Austin housing market is still sizzling! According to the Austin Board of Realtors (ABOR), the housing slump affecting the rest of the country is not having an impact on Austin.
In September home sales reached 2,300 for the month. This is a 3% increase from the previous year and a new record for the month of September.
Active single-family listings reached 8,203 which are 5% higher from 2005. There was inversely a drop in the average time that it takes a house to sell. In September, the average time a house was on the market was 58 days; this is a 15% drop from previous months. This is the shortest amount of time single-family listings have waited to sell since September 2001, when the average was 46 days, according to ABOR.
Remarkably, the housing market in Austin and in much of Texas has not had its proverbial "bubble" popped. Regardless of the seemingly negative news regarding the housing market, Austin's has remained robust. With the increase in employment and continuing strength in the commercial sector, this trend is likely to continue into 2007.
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In September home sales reached 2,300 for the month. This is a 3% increase from the previous year and a new record for the month of September.
Active single-family listings reached 8,203 which are 5% higher from 2005. There was inversely a drop in the average time that it takes a house to sell. In September, the average time a house was on the market was 58 days; this is a 15% drop from previous months. This is the shortest amount of time single-family listings have waited to sell since September 2001, when the average was 46 days, according to ABOR.
Remarkably, the housing market in Austin and in much of Texas has not had its proverbial "bubble" popped. Regardless of the seemingly negative news regarding the housing market, Austin's has remained robust. With the increase in employment and continuing strength in the commercial sector, this trend is likely to continue into 2007.
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10.23.2006
Austin Employment Information
In an artcile released Friday, October 20th, the Austin Business Journal reports that the Austin/Round Rock area unemployment rate has dipped to 3.8%. That is down from the August unemployment rate of 4.2%. In September of 2005, the unemployment rate was 4.3%. In looking at total jobs created, Austin gained 3,800 non-agricultural jobs in September. From September 2005 through September 2006, a total of 18,500 non-agricultural jobs have been created. This is an increase of 2.7% in 12 months.
This is great news for the Austin/ Round Rock economy, and more particular, the housing market. As I have said before, housing directly correlates with jobs. The more people that are working, the more housing that is needed by those workers. If this trend continues, we can look forward to a healthy local economy and a continuing strong housing market.
This is great news for the Austin/ Round Rock economy, and more particular, the housing market. As I have said before, housing directly correlates with jobs. The more people that are working, the more housing that is needed by those workers. If this trend continues, we can look forward to a healthy local economy and a continuing strong housing market.
10.17.2006
Austin Housing Update
It appears that the Austin housing market is strong compared to the rest of the Country!
This is mainly due to the fact that Austin is a relatively young metropolis and large companies are continuing to see Austin as a great city to invest in. A sure sign that points to a continuing housing boom is seen in the commercial real estate market, where rents continue to rise, and the office space once left empty from High Tech companies is being filled by other large and mid sized companies. Where there are companies investing in office space, there are new jobs, which relates to a need for housing. If this continues, we should see prices that continue to rise modestly and a housing market that will likely remain strong.
This is mainly due to the fact that Austin is a relatively young metropolis and large companies are continuing to see Austin as a great city to invest in. A sure sign that points to a continuing housing boom is seen in the commercial real estate market, where rents continue to rise, and the office space once left empty from High Tech companies is being filled by other large and mid sized companies. Where there are companies investing in office space, there are new jobs, which relates to a need for housing. If this continues, we should see prices that continue to rise modestly and a housing market that will likely remain strong.
10.11.2006
Young Austin Real Estate Professionals
YAREP
I am pleased to announce that efforts are underway for the formation of an Austin Real Estate group called Young Austin Real Estate Professionals. The purpose of the group is to gather real estate professionals and industry insiders on a regular basis to share ideas and enjoy social events. We feel that it is very important that professionals get together to discuss their business, share ideas, and help each other succeed.
YAREP is being formed by Michael Brandt, Cody Daniel, John Segrest, and Leslie Brvenik. We will be announcing our first social event in the coming weeks and will also start a dedicated website for the group. Be on the lookout for further details.
Sincerely,
Michael Brandt
I am pleased to announce that efforts are underway for the formation of an Austin Real Estate group called Young Austin Real Estate Professionals. The purpose of the group is to gather real estate professionals and industry insiders on a regular basis to share ideas and enjoy social events. We feel that it is very important that professionals get together to discuss their business, share ideas, and help each other succeed.
YAREP is being formed by Michael Brandt, Cody Daniel, John Segrest, and Leslie Brvenik. We will be announcing our first social event in the coming weeks and will also start a dedicated website for the group. Be on the lookout for further details.
Sincerely,
Michael Brandt
Welcome!
Welcome to my new blog. Over the coming days and months I intend to fill my blog with information relevant to the Austin Housing market and the mortgage industry. Keep your eyes posted and always feel free to provide your own topics of interest.
Sincerely,
Michael Brandt
Sincerely,
Michael Brandt
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