In November, Congress extended and expanded the First-Time Home Buyer Tax Credit program to include a subset of “move-up” buyers — homeowners that have owned and lived in their home for 5 of the last 8 years for Lake Geneva real estate and all over the country.

The credit ranges up to $8,000 per buyer.  There’s now just 7 weeks left to take advantage.

To be eligible, home buyers must be under contract for a new home no later than April 30, 2010, and must be closed no later than June 30, 2010.

In addition to meeting the deadline dates, there’s a basic set of requirements to be tax credit-eligible:

• You can’t purchase the home from a parent, spouse, or child
• You can’t purchase the home from an entity in which the seller is a majority owner
• You can’t acquire the home by gift or inheritance
• Each buyer in the purchase must meet eligibility requirements

There’s other criteria, too.

For one, the sales price on the subject property cannot exceed $800,000.  Homes sold for more than $800,000 are ineligible for the tax credit.  Furthermore, households earning more than $125,000 as single-filers, or $225,500 for joint-filers, are ineligible.

You can read the complete eligibility requirements at the IRS website, or, you may just find it simpler to speak with your accountant about it.  There are some nuances in qualifying for and claiming the tax credit on your returns and getting a professional’s opinion is always wise.  If you don’t have a great accountant I would be glad to refer one to you.

And lastly, don’t forget that government’s tax credit program is a true tax credit.  It’s not a tax deduction.  This means that a tax filer whose “normal” tax liability is $3,500 and who is eligible for $8,000 in credit will receive a $4,500 refund from the U.S. Treasury.

If you’re currently in the House Hunt, mark your calendar for April 30, 2010.  It’s 7 weeks away and you can be sure that as the date gets closer, buyer traffic is going to increase.  You may find sellers more willing to negotiate today for Lake Geneva real estate than several weeks from now.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

Lake Geneva real estate mortgage markets improved last week in low-volume trading.

Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position.  Mortgage rates drifted lower through Thursday afternoon.  But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets — and mortgage rates — reversed.

Overall, mortgage rates dropped last week, but only by a small margin.  Rates were best Thursday afternoon.

It was the second consecutive week in which mortgage rates fell.

Last week was also interesting in that both stock markets and bond markets improved, proving that rates don’t always rise when stock prices do.  455 of the S&P 500 companies posted gains last week.

If you’re shopping for a Lake Geneva home or a refinance, though, don’t rest on your laurels.  After Friday’s big sell-off, this week opens into a major headwind and, plus, the Federal Reserve’s support for mortgage markets ends in just 3 weeks.

This week, without much data to influence traders, the upward momentum in rates may have little cause to temper.  We’ll see the Consumer Confidence numbers on Tuesday and Retail Sales on Friday.  Beyond that, there’s not much else.

After last week’s performance, conforming mortgage rates Lake Geneva real estate may be poised to rise rather sharply.  If you’re waiting for the right time to lock your rate, it may have been this past Thursday.  Consider locking your rate early this week to protect against further rate hikes.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

Fewer homes went under contract in January as the Lake Geneva real estate housing market continues to limp through the winter months.

According to the National Association of Realtors®, the Pending Home Sales Index fell to its lowest level in 3 quarters this January.  By contrast, in October 2009, the index had touched a 3-year high.

The Pending Home Sales Index measures the number of homes that have gone under contract to sell, but have yet to close nationwide.  It’s compiled using data from more than 100 regional listing services and 60-plus brokerages  — the sample set encompasses 20 percent of all home resales in a given month.

Economists have come to rely on the Pending Home Sales Index because of its high correlation to actual home sales.  80% of all home marked “pending” close within 60 days.  Many of the rest close within 120.

Therefore, when we see Pending Home Sales show weakness like it did in January, we can infer that home resales will remain weak through the spring.

But will they really?

1. Fewer sales should drag down home prices, bringing more buyers into the market.
2. Mortgage rates are still very low, but are poised to rise in just a few weeks.
3. The home buyer tax credit requires buyers to be in contract by April 30, 2010

In other words, there’s a confluence of factors that could lead to a rush of sales for Lake Geneva real estate and around the country over the next two months, reversing the housing market’s recent momentum.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

Conforming and FHA mortgage rates in Lake Geneva, Wisconsin have improved over the last 10 days, but that could all change this Friday with the release of February’s Non-Farm Payrolls report.

Non-Farm Payrolls is the official name of the government’s monthly jobs report and, given the fragile state of the U.S. economy, Wall Street will be watching it closely.

Lake Geneva real estate mortgage rates could spike come Friday morning.

Jobs are an important part of the nation’s recovery.  Among other concerns, unemployed Americans don’t spend as much money on goods and services, and are more likely to default on a mortgage.  This retards economic growth and increases the potential for foreclosures.

When jobs numbers worsen, therefore, it follows that economic projections worsen, too.

Poor employment figures draw money away from the stock markets and into less-risky bond markets, including mortgage-backed bonds.  Mortgage rates for Lake Geneva real estate and all over Wisconsin improve as a result.  Conversely, when jobs numbers improve, stock markets gain and bond markets worsen.

Analysts expect that a net 30,000 jobs were lost in February.

The Bureau of Labor Statistics press release hits at 8:30 A.M. ET, roughly an hour before Friday’s mortgage pricing will be available to consumers.  If you’re worried about rates rising on the heels of a strong jobs report, therefore, be sure to get your rate lock in today instead.  Once Friday gets here, it may be too late.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

The winter months have not been kind to Lake Geneva real estate home sales.

After plunging 17 percent in December, Existing Home Sales fell by an additional 7 percent in January, according to the National Association of Realtors®. An “existing home” is a home resold by a previous owner (i.e. not new construction).

In looking at the annualized, adjusted Existing Home Sales data, we find:

1. Sales volume is at its lowest levels since June 2009
2. Sales volume fell below its 12-month rolling average
3. Home supplies are at a 5-month high

These are similar findings to the New Home Sales data issued by the government last week.   That report put new home sales at a 40-year low and showed new homes supplies higher by an entire month.  The same can be said for Lake Geneva real estate.

But don’t think housing rebound has halted!   Home sales are cyclical and there are outside forces on today’s market.

For one, the market is still feeling the after-effects of the original First-Time Home Buyer Tax Credit.  Sales spiked in the months leading up to the original November 2009 expiration date.  A pull-back is natural and expected.

Looking at the long-term trend, Existing Home Sales volume appears right in line.

Furthermore, weather across much of the U.S. was awful in January.  As we know the weather in Lake Geneva, Wisconsin was awful as well.  That, too, can impede home sales as homes are neither shown nor negotiated when weather is majorly inclement.

Anecdotal evidence is showing sales activity higher through February and into March.  And, although it’s unlikely we’ll see a spike through April like we did last November, buy-side demand for homes should remain strong.  The good news of the sagging sales reports is that today’s buyers may find home prices are lower and sellers are more willing to negotiate.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

Lake Geneva real estate mortgage markets improved last week as economic reports painted a less-than-stellar portrait of the U.S. economy and concerns of a looming monetary policy change eased.  Mortgage pricing improved dramatically, despite a late-Friday retreat.

Mortgage rates are now at their lowest levels since early-February.

Last week was heavy on negative data:

• Consumer Confidence posted 16% short of expectations
• New Home Sales posted 13% short of expectations
• Initial Jobless Claims were higher than expected

In addition, both the Case-Shiller and Home Price Indices showed a slight pullback in the housing sector.

The impact of these statistics was muted, however.  This is because Fed Chairman Ben Bernanke gave his semi-annual outlook to Congress and markets focused more on the chairman verbiage than hard data, looking for clues about the future of Fed policy.

Bernanke stayed on message — the Fed Funds Rate will stay low for an extended period of time.

Lake Geneva real estate mortgage rates were also helped by a strengthening U.S. dollar and demand for U.S.-denominated bonds.  When demand for mortgage-backed bonds is strong, mortgage rates fall.

This week, mortgage rates will jockey around Friday’s Non-Farm Payrolls report.

Jobs are playing a large role in mortgage bond trading and markets expect that 30,000 jobs were lost in February.  If the actual figure is better than 30,000 jobs lost, mortgage rates will rise.  If it’s worse, rates will rise.

Other important data this week include Personal Consumption Expenditures — the Fed’s preferred inflation gauge — plus the Fed’s Beige Book release.   Mortgage rates remain in flux so float with caution.

Mortgage rates look good today, but by Friday, they could be much, much worse.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

Earlier this week, the private-sector Case-Shiller Index showed home prices slightly lower between November and December.  Thursday, the public-sector Home Price Index showed the same.

Publishing on a 2-month lag, the Federal Home Finance Agency said home prices fell by 1.6 percent nationally in December.  And that’s an average, of course.  Some regions performed well in December as compared to November, others didn’t.

• Values in the Middle Atlantic states improved slightly
• Values in New England were essentially unchanged
• Values in the Mountain states sagged, down 3.5%

These aren’t just footnotes. They’re an important piece toward understanding what national real estate statistics really mean. In short, “national statistics” are just a compilation of a bunch of local statistics.

For example, if we dig deeper into the FHFA Home Price Index 70-page report, we find that cities like Terre Haute, IN, Buffalo, NY, and Amarillo, TX posted year-over-year home price gains. You won’t see that in a “national” report.

Furthermore, it’s a sure bet that those same cities, you could find neighborhoods that are thriving, and others that are not.  Just because the city shows higher home values overall, it won’t necessarily be the case for every home in the city.

Every street in every neighborhood of every town in America has its own “local real estate market” and, in the end, that’s what should be most important to today’s buyers and sellers.  National data helps identify trends and shape government policy but, to the layperson, it’s somewhat irrelevant.

So, when you need to know whether your home in Walworth is gaining or losing value, you can’t look at the national data.  You have to look at your block — what’s selling and not selling — and start your valuations from there.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

The housing recovery showed particular weakness in the New Homes Sales category last month — good news for homebuyers around the country, but especially in Lake Geneva, Wisconsin.

A “new home” is a home for which there’s no previous owner.

New Home Sales fell 11 percent from the month prior and posted the fewest units sold in a month since 1963 — the year the government first started tracking New Home Sales data.

Right now, there are roughly 234,000 new homes for sale nationwide and, at the current sales pace, it would take 9.1 months to sell them all.  This is nearly 2 months longer than at October 2009’s pace.

The reasons for the spike in supply are varied:

• The original home buyer tax credit expired in November
• Weather conditions were awful in most of the country in January
• Weak employment and consumer confidence continue to hinder big ticket sales

Now, these might be less-than-optimal developments for the economy as a whole, but for buyers of new homes, it’s a welcome turn of events.  Home prices are based on supply and demand, after all.  There is a great supply of Lake Geneva real estate homes available right now.

As a result, this season’s home buyers may be treated to “free” upgrades from home builders, plus seller concessions and lower sales prices overall.

It’s all a matter of timing, of course.  New Home Sales reports on a 1-month lag so it’s not necessarily reflective of the current, post-Super Bowl home buying season.  And from market to market, sales activity varies.

That said, mortgage rates remain low, home prices are steady, and the federal tax credit gives two more months to go under contract.  It’s a favorable time to buy a new Lake Geneva real estate home.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

You can’t get your mortgage rates from the newspaper.  Last week proved it.   Again.

Friday morning, headlines in Lake Geneva, Wisconsin and around the country read that mortgage rates were down 0.04 percent, on average, since the week prior.

A sampling of said headlines includes:

• US Mortgage Rates Drop For 2nd Straight Week (Reuters)
• Mortgage Rates On 30-year US Loans Fall To 4.93% (Business Week)
• 30-Year Fixed Mortgage Rate Falls Farther Below 5% (Marketwatch)

The story behind the headline was sourced from the Freddie Mac Primary Mortgage Market Survey, an industry-wide mortgage rate poll of more than 100 lenders.   The PMMS has reported mortgage rate data to markets since 1971 and is the largest of its kind.

Unfortunately, Lake Geneva real estate rate shoppers can’t rely on it.

See, unlike governments and private-sector firms, when consumers are in need mortgage rate information, they need the information delivered in real-time; for making decisions on-the-spot.   Consumers need to know what rates are doing right now.

The Freddie Mac survey can’t offer that.

According to Freddie Mac, the survey’s methodology is to collect mortgage rates from lenders between Monday and Wednesday and to publish that data Thursday morning.   The survey results are an average of all reported mortgage rates.  The problem is that mortgage rates change all day, every day.   The PMMS results are skewed, therefore, by methodology.

And, meanwhile, the issue was compounded last week because mortgage rates shot higher Wednesday afternoon — after the survey had “closed.”  The market deterioration ran into Thursday, too — again, unable to be captured by Freddie Mac’s PMMS.

Although the Wisconsin and national newspapers reported mortgage rates down last week, they weren’t.   Conforming mortgage rates were higher by at least 1/8 percent, or roughly $11 per $100,000 borrowed per month.  In some cases, rates were up by even more.

Newspapers and websites can give a lot of good information, but pricing is far too fluid to rely on a reporter.  When you need to know what Lake Geneva real estate mortgage rates are doing in real-time, make sure you’re talking to a loan officer.   Otherwise, you may just be getting yesterday’s news.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate

Mortgage markets had a terrible, holiday-shortened week last week as Wall Street responded to worse-than-expected inflation data and action from the Federal Reserve.   Mortgage bonds sold off with force, causing mortgage rates to rise for the second week in a row.

Last week was a bad week to float a mortgage, to say the least.  Rates in Lake Geneva rose by the largest margin in any week since late-2009.

The two biggest stories from last week both came from the Federal Reserve.  The first was the release of the FOMC January meeting minutes which showed more confidence in the U.S. economy than Wall Street expected, and the second was the Fed’s surprise announcement to raise the nation’s Discount Rate to 0.75%.  Both sparked risk-taking on Wall Street and bonds sold-off as a result. 

Now, the Fed Funds Rate won’t climb anytime soon and neither will Prime Rate, but the Fed has sent a clear message to the markets — The Era of Loose Monetary Policy is over.  Lake Geneva real estate owners and future owners would be best served to consider their options sooner than later.

This week, there’s a lot of economic data set for release.

• Tuesday : Case-Shiller Home Price Index, Consumer Confidence
• Wednesday : New Home Sales
• Thursday : FHFA Home Price Index, Initial Jobless Claims
• Friday : Existing Home Sales, Personal Consumption Expenditures

With markets already on edge, any better-than-expected results should be bad for mortgage rates.

After last week’s performance, conforming mortgage rates for residents of Lake Geneva, Wisconsin and its surrounding areas have now unwound most their January gains.  If you’re waiting for the right time to lock, it may have been 2 weeks ago.  Consider locking in this week to protect against any further deterioration in price.

Travis Egan Asst Vice President / Loan Officer Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-4203 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate