Monday, February 9, 2009
Saturday, February 7, 2009
Investing in Housing (Without Buying a House)
Is it possible to be a real estate investor even though you don't own any real estate? Sure thing, says Sam Masucci, president and CEO of MacroMarkets, an exchange-traded fund manager cofounded by housing expert Robert Shiller. By purchasing MacroShares Major Metro Housing securities, investors can benefit from rising home prices without having to call a Realtor. The fund, which is expected to launch before the end of the year, is linked to the closely followed S&P/Case-Shiller Home Price Indexand allows investors to place bets on the direction of home prices. In a recent interview with U.S. News, Masucci detailed how the product works and explained the different ways it can benefit investors and homeowners alike. Read more here...
Senate readies $780 bln stimulus plan for vote
Senate readies $780 bln stimulus plan for vote
http://www.marketwatch.com/news/story/senate-debates-details-780-billion/story.aspx
Mortgage Rates Rise Slightly
Mortgage Rates Rise Slightly
The House passed one fiscal stimulus plan, and the Senate is expected to vote on its version any day now.
The combined government spending for this new package, along with the TARP program and a proposed bank cleanup plan, will total trillions of dollars.
An enormous amount of new debt will be issued to pay for all the government programs, which may push interest rates higher for all types of bonds.
It’s a widely held view that the economy is very weak right now, and Friday’s downbeat Employment report came with little surprise.
The US economy lost about 600K jobs in January, following a decline of 3 million jobs in 2008.
Read more of the original article here...
Fed Attacks Mortgage Rates: 4 Things to Know
Fed Attacks Mortgage Rates: 4 Things to Know
The Federal Reserve on Tuesday announced a new approach to stabilizing the housing market: driving down mortgage rates.
The effort is based on a two-pronged program that involves buying up to $100 billion in debt of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, while at the same time purchasing up to $500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae.
The initiative is intended to lower Fannie and Freddie’s financing costs, which will enable the government-controlled, mortgage-finance giants to pass along those savings to consumers in the form of lower interest rates.
Here’s what you need to know:
1. Wide Spreads With home prices continuing to decline and investors unsure as to the extent of the government’s support of Fannie and Freddie’s obligations, the mortgage finance giants have had to pay higher premiums on their debt. This increases their cost of funding and translates into more expensive interest rates for consumers. “Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late,” the Fed said in a statement announcing the initiative. “This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.”
2. Half Point Cut So what will the actions mean for mortgage rates? Keith Gumbinger, of HSH Associates, says that the moves could bring fixed mortgage rates down by as much as a half point.
More mortgage meltdown misery
More mortgage meltdown misery
The US economy is poised to be smacked by another wave of mortgage defaults that could cause as much damage as the subprime meltdown.
According to Credit Suisse, $1,000bn (£694bn, €772bn) of Alt-A and Option ARM mortgages – the dubious loans used to propel home sales through the final years of the housing bubble – are scheduled to have their interest rates reset from now through to summer of 2011.
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