Home Front: Lenders’ phones silent as rates rise

By Jim Wasserman
jwasserman@sacbee.com

http://www.sacbee.com/business/story/1940229.html


Mortgage rates, rising quickly from near-historic lows earlier this year, are already having negative consequences in the capital region.

"All of a sudden the phones just stopped ringing," said Michael McGee, president of Rancho Cordova’s Winchester McGee Real Estate & Loans.

"At least right now, the refinance window has somewhat shut," added Brent Wilson, senior loan consultant at Sacramento’s Comstock Mortgage.

It’s also spooking buyers who haven’t locked in a rate.

"I called my agent and said, ’We have to cancel,’ " said Toby McBride of Citrus Heights on Thursday. He and his wife put in an offer on a house June 1 when rates were 5.12 percent. When the deal wasn’t agreed to by Tuesday, with rates at 5.87 percent, they pulled the plug. (The new rate would add $175 a month to payments, said McBride, a federal worker).

"Definitely, the sudden change in interest rates has caused us to rethink our condition and lower our search price," he said.

As investors stew about inflation in the long run, rates are pushing back toward 6 percent and have reached a seven-month high, according to mortgage giant Freddie Mac.

The firm’s Thursday survey revealed a national average of 5.59 percent (plus points) earlier this week for a 30-year fixed-rate loan. That’s up from 5.29 percent last week.

Thursday, financial Web site Bankrate.com showed an overnight average of 5.74 percent.

"It just pretty much happened so quickly," said Charlene Singley, an agent with Lyon Real Estate and president of the Sacramento Association of Realtors. "I think it will take a while for people to realize that this is where the rates are now."

"I think we’ll get some improvement from where we are today," said McGee. "But back to the high fours? It’s possible, yes. Likely? I question that."


New home sales suffer

Thousands of distressed existing homes are making life harder and harder for Sacramento-area home builders. Their April sales numbers revealed the capital-area market as one of the state’s weakest, according to the California Building Industry Association.

Builders in El Dorado, Placer, Sacramento and Yolo counties sold 290 houses in April. That was seven fewer than in March, and 48 percent below the same month last year, CBIA said this week. Builders in Yuba and Sutter counties sold 33 – better than March – but down 25 percent from the same time last year.

The numbers put area builders on track for a worse year than 2008, when they sold just 4,847 homes, according to Hanley Wood Market Intelligence.

In 2004 they sold 17,491.

The declines come amid fierce competition with discounted bank repos and short sales. In April, builders closed just 9.6 percent of the escrows in the capital area, compared with 24.5 percent in April 2005.

Statewide trends were a little better. Builders said sales were almost 7 percent better in April than March. But they were still down 31 percent from April 2008.

The CBIA said the median April sales price for a new house in El Dorado, Placer, Sacramento and Yolo counties was $292,900. It was $237,000 in Yuba and Sutter counties.


More time for renters

Oh, no. Home Front muffed a figure last week in an item about the Obama administration adding new protections for renters. In mistakenly noting that California renters get 30 days’ notice to move after banks repossess houses, we overlooked last year’s state Senate Bill 1137.

The bill gave tenants affected by foreclosure an extra 30 days’ notice – to 60 days – through Jan. 1, 2013.

President Barack Obama, however, just signed a bill that gives renters with month-to-month arrangements 90 days’ notice in foreclosure situations. Renters with leases in foreclosed homes stay until leases expire.


Profiting from feng shui

These days everyone is worried about money. But how do you get more? Here are a few feng shui ideas to increase your flow of wealth at home. For these, thank New York real estate broker Debra Duneier:

• The burners on your stove represent wealth. Keep them clean and alternate your use of the burners when cooking … The refrigerator should be filled with healthy food. A full refrigerator brings in abundance.

• The indoor plants that are wealth enhancers are bamboo and jade plants.

• Take three lucky Chinese coins and tape them to the back of a rug. Every time someone walks in (your home’s entry point) they symbolically are bringing money into your property and into your life.

• Keep toilet seats down when not in use. Keep them up and money will disappear.


More tax credits sought

Finally, an update on tax credits: The California Franchise Tax Board reports that buyers of new, unoccupied homes have requested $82.5 million of the $100 million allocated for $10,000 tax credits.

The building industry is working the state Legislature to add more millions. In Washington, D.C., real estate and business executives are lobbying Congress for a new $15,000 tax credit for all buyers. A current $8,000 tax credit is just for first-time buyers.