PARAMOUNT MORTGAGE - LENDER'S BLOG

America’s Best Long-Term Real Estate Bets

Around the holiday season everyone is making lists and checking them twice. We like lists of all kinds including ones full of gifts and holiday parties, but especially when they indicate good news for St. Louisans. Forbes’ Magazine top ten list of the best cities for long-term real estate ownership placed St. Louis in the 6th spot.

Forbes.com evaluated the 40 largest Census-defined metro areas using the last 25 years of data from National Home Builder’s Association (NAHB). The two major selection criteria involved the calculation of volatility in supply (new construction) and demand (vacancy rates). A region’s rate of new construction historically controls housing prices by governing supply and demand.

Job-growth forecasts were also factored to determine a region's long-term strength. As new workers head to an area they will purchase housing inventory leading to predictable positive absorption rates.

Also considered were Forbes’ predictions of future economic growth through 2017 from data tabulated at Moody's Economy.com. Analysis included the Bureau of Labor Statistics’ (BLS) information on market sectors, each local area's business costs, and growth prospects.

The St. Louis region possesses strong fundamentals for market growth. Our overall economy and housing stock grew in value, but avoided large swings in times of excess and stress. According to Forbes, St. Louis had “a ranking of fifth in vacancy volatility and 13th in building volatility. Builders and city planners have done a better job than those in most cities of resisting overexpansion.”

Here are the Forbes’ picks with job-growth projections 2008-2017:

1. Seattle, Wash.Job-growth projections 2008-2017: 1.5%
2. Washington, D.C.Job-growth projections 2008-2017: 0.9%
3. San Antonio, TexasJob-growth projections 2008-2017: 2.0%
4. Minneapolis, Minn.Job-growth projections 2008-2017: 1.1%
5. New York, N.Y.Job-growth projections 2008-2017: 0.6%
6. St. Louis, Mo.Job-growth projections 2008-2017: 0.3%
7. Philadelphia, Pa.Job-growth projections 2008-2017: 0.2%
8. Cincinnati, OhioJob-growth projections 2008-2017: 0.5%
9. Portland, Ore.Job-growth projections 2008-2017: 1%
10. Atlanta, Ga.Job-growth projections 2008-2017: 2%

Source Link: America’s Best Bets

First-Time Home Buyer's $7,500 Tax Credit

A new provision in the U.S. Housing and Economic Recovery Act of 2008 has generated lots of interest – the first-time home buyer’s $7,500 tax credit.

Realtors and their clients should take note of this valuable inducement, but it lasts for only a limited time. The tax credit ends June 30, 2009.

Here’s an at-a-glance synopsis of the important points:

• Qualifications: A home buyer may not have owned a home in the previous three (3) years to qualify.
• Income Restrictions: The maximum income for individuals filing as “Single” or “Head of Household” is $95,000; individuals filing a joint return may have income of no more than $170,000.
• Determining the Credit: The credit is determined by taking 10% of the sales price of the home up to the credit limit of $7,500. A buyer purchasing a home for $75,000 or more earns the maximum credit of $7,500. A home purchase under $75,000 would earn a credit equal to 10% of the home price. For example, a buyer who pays $50,000 for a home would earn a $5,000 credit (10% of $50,000).
• Claiming Your Credit: You must file your federal income tax return to receive the first-time home buyer’s credit. No applications are required, but consult with your tax advisior when filing your return.
• Payback: The year after you take the credit off your payable federal income tax, you will add back in 1/15 of the credit to your tax due. For the maximum credit of $7,500, this would be $500 each year for 15 years ($7,500 ÷ 15 years = $500). For a credit of $5,000 this would be $333.33 each year for 15 years ($5,000 ÷ 15 years = $333.33). Buyers end up with a no-interest loan.
• Selling Your Home: If you sell your home before the complete payback, the entire remainder of your unpaid tax credit is due in the tax-filing year your home was sold.
• Refundable: Households with incomes too low to owe income tax would receive a refund check from the IRS for the credit amount.
• Effective Dates: The credit applies to any home purchased after April 8, 2008 and before July 1, 2009.

Is the financial bailout working?

St. Louis media seeks expert advice from Paramount Mortgage

St. Louis, MO -- “With so much debate over bailouts and the recession, now comes a sliver of hope that the banking bailout money may finally be trickling down and starting to restore some confidence in the mortgage markets,” stated Matt Sczesny, news reporter at KMOV television during a live broadcast Wednesday night.

Sczesny approached Paramount’s senior vice president Ruth E. Battle for expert commentary to be included in his story about falling mortgage rates and their affect on the St. Louis real estate market.

Dropping interest rates are attracting home buyers back into the market. Existing home owners are dumping their high interest rate mortgages and refinancing to reduce their monthly payments. This has resulted in a spike in new mortgage applications at Paramount Mortgage. “I think that this is part of the bailout plan that is actually working,” remarked Battle. “Consumers can benefit from the lower interest rates that are being offered right now.”

Sczesny noted that the web site bankrate.com, which tracks the national averages, indicated that the 30-year fixed mortgage rate in October was at a high of 6.5% and has now fallen to near 5.6%.

“We can look back and see that where the housing industry has gone our economy has followed,” commented Battle, “so when positive things happen in the market” in regards to falling interest rates, “it helps new people buy houses,  gets the supply of houses down, and increases the demand for those homes. I’m looking for some positive things to happen.”

See the entire news story interview which streams online at the KMOV television web site by clicking here: Mortgage rates dropping fast