Good Afternoon,
I hope you had a nice weekend. If every winter day could be like Saturday, I’d be a happy man. It reminded me of when I lived in Lake Tahoe…too long ago! I’m also happy that our Blackhawks are still undefeated in regulation…incredible.
On today's call: Markets, Housing, Title Insurance, Interest Rates
The markets opened lower today after quite a streak since the new year. The S&P 500 ended higher last week for the sixth consecutive time and the Nasdaq closed at a 12-year high. Tomorrow, President Obama will deliver his annual State of the Union address before Congress so look for the markets to react accordingly. Political uncertainty in the US and abroad has dampened much of the recent optimism so it’ll be interesting to see how Obama’s comments in regards to the economy address these political issues. There are no major economic or earnings reports coming out so trading should be relatively quiet, meaning rates should stay about the same this week, barring any major change.
In housing, the National Association of Realtors reported the national median home price saw the best year-over-year increase in seven years. Unfortunately, Chicago is still lagging behind most major metro areas. But affordability levels are still fantastic, even here, and rates continue to stay extremely low. (We aren’t at the 4% threshold but getting close. But sorry, anyone who thinks 4% is too high has been spoiled for too long!) We are seeing much more contract activity lately , as housing demand is increasing nationwide. In many cities, like Chicago, rent prices are getting out of control (if you haven’t noticed). The good news locally, is that homebuilders reported that new-home sales jumped 18% in 2012, ending a six-year sales slide. Single-family homes in the suburbs posted the highest gains, but overall, the wheels seem to be moving a little quicker.
Title insurance is a policy you buy when you purchase a home. When you get a mortgage, it is mandatory. When you buy in cash, it’s up to you. There are two policies, an owner’s policy (which protects you) and a lender’s policy, which protects the investor. In a nutshell, the protection is against any claims, liens, encumbrances, etc., that may arise from numerous sources, such as governmental bodies, contractors, lenders, creditors, or even the IRS. It is a unique form of insurance as it provides coverage for future claims (or future losses) due to title defects that occurred in the past (i.e. before you bought the property). Title insurance does not pay for damage to the property, that’s what hazard (homeowner’s ) insurance is for. These title policies can be expensive (although the owner’s policy is usually paid for by the seller) and when you refinance you are only re-purchasing a new lender’s policy (as there is a new mortgage/deed). You, the owner, your family and your heirs have rights or claims in and to the property you own and this form of insurance protects your ownership in the real estate and any improvements located on the land. Attention cash buyers: do not forget to purchase it!
Interest rates are holding steady right now, keeping in line with a relatively quiet stock and bond market. The 30 year fixed rate is just over the 3.5% range with no points, but we’ll see how things go during the week.
Please don’t hesitate to contact me for any mortgage needs. And please share this with you networks as all my business comes from recommendations and I always appreciate yours! Thanks again and have a great week.....
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