NAR: New Fed plan will drive down interest rates and help stabilize housing

WASHINGTON – Nov. 26, 2008 – Calling it great news for homebuyers, home sellers and the U.S. economy, the National Association of Realtors® (NAR) praised a plan announced yesterday by the Federal Reserve. Under the plan, the Fed will purchase housing-related debts of Fannie Mae and Freddie Mac, thus freeing up mortgage money on Main Street. The move is one of four points advocated by NAR in a recent Call-to-Action.

“This is one of the key actions we’ve been advocating ever since the Treasury altered its course on how it would use the $700 billion recovery package passed in September,” says NAR President Charles McMillan. “This is great news for homebuyers and sellers, and we applaud the Fed for taking this historic step. Housing recovery is the key to economic recovery in this country and it always has been.”

In a four-point plan submitted to Congress last month, NAR called for the Treasury Department to purchase mortgage-backed securities (MBS) from banks to provide price stabilization for housing. The Fed yesterday said it would purchase mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae for up to $500 billion.

“This will be critical to a housing recovery,” McMillan says.

Lawrence Yun, NAR chief economist, agrees that purchasing the debt obligations of Fannie and Freddie is an important move.

“We commend the Fed decision because it will directly bring down long-term interest rates,” Yun says. “The level of investment should be aggressive enough to bring interest rates down in a meaningful manner. As we’ve seen in past recessions, home sales rise when mortgage interest rates fall.” Yun says that interest rates on 30-year fixed-rate mortgages are too high given the present state of the mortgage market.

“If Fed action brings down mortgage interest rates by even 1 percentage point, it would increase homes sales by 500,000 units,” Yun says. “That should help to draw inventory down and stabilize prices.” Yun says that the U.S. needs higher home sales to absorb inventory and stabilize prices. “Only with stabilization in home prices can we have a healthy housing and economic recovery.”

In its announcement, the Fed said it would purchase up to $100 billion of Fannie, Freddie and Ginnie debt from primary dealers through a series of competitive auctions that will begin next week. Selected asset managers will conduct purchases of up to $500 billion in MBS before year-end. Both the direct obligations and MBS purchases are expected to take place over several quarters.

© 2008 FLORIDA ASSOCIATION OF REALTORS®

Real Estate Market Focus

Emotional Factors Key in Homebuying, Study Finds

By Bradley Finkelstein

PARSIPPANY, NJ – A survey conducted for Coldwell Banker Real Estate LLC found that more than three out of every four persons surveyed said the quality of a home is more important than the square footage.

The survey was driven by the results of a less formal online quiz, which piqued the company’s curiosity as to what are the emotional factors in a home buying decision.

Almost 60% of the respondents said “the feel” of a home was just as important as the price.

First impressions count; the survey found that 12% believed the home was “the one” even before stepping inside. That went up to 51% after the first visit.

How to Handle Being Carded at Checkout with your Credit Cards?

How to Handle Being Carded at Checkout with your Credit Cards?

 

Have you ever been at the grocery store or at the mall when a retailer asks you for your identification? I know this has happened to me hundredes of times in my life. Practically any time I go into a retailer store I am asked.

 

Did you know that Mastercard, Visa, and Discover forbid retailers from requiring an additional form of identification with a signed creditcard? And that American Express strongly discourages the practice? Well, neither did I until I read a recent snippet on privacy in my June issue of Money Magazine.

 

I did not quite trust the article, so I checked out the Mastercard and Visa merchant manuals to verify (text below) and no doubt — it is right there in plain English. To be clear, merchants can ask to see your identification, but with your refusal to provide it, they cannot prevent you from completing the purchase as long as you have a signed valid card. It is within your rights refuse to provide your driverslicense or other identification. Of course, unless this information is required to complete your purchase — say you are shipping an item.

 

Why is this important? Credit card fraud is the biggest reason. If a merchant is able to obtain your credit card number, expiration date, security code (CID), and the address and zip code information — that is more than enough to commit several types of identify theft and / or credit card fraud. By not providing your information on the drivers license, you prevent those critical pieces of information required to commit fraud from getting into the hands of the criminals.

 

You may think, wait a second — how quickly can they remember all of that information, and in many cases — you are right. It is somewhat difficult while you are standing there to capture all of your details. However, all the questionable individual needs to do is remember that 5-digit zip code from your ID. With your credit card swipe – they have everything else they need as most vendors verify the Credit Card number, the expiration date, the CID, and the billing zip code with purchases. 

 

So, the moral of the story is to be careful of who you give your drivers license to and think twice the next time a merchant asks for identification! While there are two schools of thought here, to me it is clear that the overall damage that someone can do with with the complete information is much higher and time consuming that dealing with the loss or charges on one credit card.

 

How serious of a problem is this? Serious enough to the credit cardcompanies that they have setup phone hotlines and in some cases even online forms! For Mastercard you can either call 800-MC-ASSIST or go online here. For Visa, call 800-VISA-911. And finally, for Discover Cards call 800-Discover. In many cases they will either convince the merchants to accept your card without identification or write up the vendor for an agreement violation.

 

From the Mastercard merchant manual on page 48:

 

 

9.11.2 Cardholder Identification A merchant must not refuse to complete a

MasterCard card transaction solely because a cardholder who has complied with the conditions for presentment of a card at the POI refuses to provide additional identification information, except as specifically permitted or required by the Standards. A merchant may require additional identification from the cardholder if the information is required to complete the transaction, such as for shipping purposes. A merchant in a country or region that supports use of the MasterCard Address Verification Service (AVS) may require the cardholder’s ZIP or postal code to complete a cardholder-activated terminal (CAT) transaction, or the cardholder’s address and ZIP or postal code to complete a mail order, phone order, or e-commerce transaction.

 

And from the Rules for Visa Merchants, Page 29.

 

 

Requesting Cardholder ID:

When should you ask a cardholder for an official government ID? Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt.

‎

Report Reveals Real Estate Key Industry For Texas

By James Comtois

Real estate is the third most important private industry in Texas, accounting for 7.8% of the state’s total gross domestic product in 2006, ranking behind manufacturing (13.4%) and mining (9.8%), according to the latest data from the U.S. Bureau of Economic Analysis.

“The GDP is the broadest measure of economic importance when looking at the overall economy,” said Ali Anari, a research economist with the Real Estate Center at Texas A&M University.

Mr. Anari studied the real estate industry’s role in the state’s economy and compiled his findings in the Center’s report, Texas Real Estate Industry Review, 2008. While the GDP is an important indicator of overall economic health, other data can be just as valuable.

The Center’s report reveals that every $1 million of revenue in the Texas real estate industry generates just over half a million dollars of revenue in other parts of the state economy. Also, every $1 million of revenue in the Texas real estate industry generates 5.16 jobs in the state real estate industry and five jobs in other industries.

Real Estate Market Focus

Builder Sees Increased Demand

By Brad Finkelstein

LEXINGTON, SC-There is a “marked increase” in the number of pre-sold custom built homes, according to one builder in this market. The reason: stabilized and lower builder material costs, coupled with lower interest rates.

“I have experienced more demand for large, high-end custom homes in the last three months than I had in the last two years combined,” said local builder Steve Baudo, owner of Baudo & Associates Home Builders Inc. here. “We typically focus our efforts on homes starting around the $400,000 and up, but lately the bulk of interest seems to be in the $1,000,000 plus range. We are in the process of gearing up to meet the demand as our pipeline continues to fill up.”

Todd Lewis, senior account representative with 84 Lumber Co., explains why some people might be interested in a custom-built home. “Lumber composites (which include pine, spruce, and fir) have dropped over 34%. Panels (plywood) have dropped over 12%. The overall lumber market has changed very little over the past 24 months. With lumber on a ten-year low and little change in the market recently, one would tend to rationalize that drastic price decreases are not on the horizon. In combination with competitive quality labor prices, readily available lots, record low interest rates, and a down lumber market, now is the perfect time to build a home not only as everyone dreams of but also as a sound investment.”