Monday, President Bush signed the Housing and Economic Recovery Act of 2008 into law and the press jumped on the obvious storylines: First-time home buyers get a $7,500 purchase "credit" Conforming loan limits move to $625,000 Delinquent homeowners get a lifeline from the FHA Local governments get federal money for buying and restoring foreclosed homes However, tucked away on the last few pages of the text, in a section called "Revenue Offsets", there's an important tax implication. The new housing law changes the way in which capital gains exclusions are calculated on the ...

Falling gas prices is doing more than saving Americans money at the pump -- it's also helping to pressure mortgage rates lower. Mortgage rates had spiked between mid-June and mid-July, mostly because economists identified inflationary signals in the U.S. economy. The largest signal, of course, was the ever-rising cost to fill a car with gasoline.  As gas prices rose, so did the overall inflationary pressure on the U.S. economy. Mortgage rates tend to rise when inflation is present because inflation devalues the U.S. dollar.  Higher rates are necessary to offset this ...

Move to Plymouth, Minnesota, says Money Magazine in its 2008 100 Best Places To Live survey. According to the report, the Twin Cities satellite has all of the makings of a desirable home town: Affordable homes Excellent schools Low crime Lots of jobs Abundant "outdoor life" The top 5 cities as listed by Money Magazine are the aforementioned Plymouth, Fort Collins (CO), Naperville (IL), Irvine (CA), and Franklin Township (NJ). The 100 Best Places To Live survey is also sortable by metrics, including housing affordability, job growth potential, and cleanest air. ...

On the wave of a two-day rally, mortgage rates improved last week overall.  This despite a Friday reversal that had caused rates to tick higher just before weekend house-hunting began. And, like so many other weeks this year, last week's mortgage market activity was defined by its quick-moving interest rates. At least one major mortgage lender issued 11 separate rates sheets between -- an average of more than 2 per day. Now, as an active mortgage rate shopper, you can't predict mortgage rate volatility but you can be prepared for it. Start by knowing which mortgage product is the ...

Statistics won't always tell the whole story, but they often provide good perspective. The graph at right shows Existing Home Sales data going back three years.  An "existing home" is one that can't be called new construction; a "used home", so to speak. Note the steep decline from 2005 through late-2007. Since November, however, Existing Home Sales have remained within a very tight range and appear to have reached a flattening point. The Existing Home Sales data supports the word-on-the-street from real estate agents nationwide that buyers are returning to the housing market in ...

Sometimes, the hardest part about news is knowing where to find it. In its filing with the SEC last week, Freddie Mac stated that it will "pursue increases" to its middleman fee.  This would likely make mortgages more expensive for every conforming borrower in the country. The exact verbiage from the filing is extremely opaque and unless a person knew what things like "delivery fees" were, or "bulk and flow transactions", he'd be inclined to skip right over the offending passage, tucked away on Page 72 in a paragraph labeled Business Outlook. But, if we paraphrase the passage and ...

After falling 7 cents per gallon over the last 7 days, gas prices are being pressured higher today as Hurricane Dolly barrels through the Gulf of Mexico. The first landfall hurricane of the season is expected to flood the southern Texas coast and cause minor disruptions to the nation's oil supplies. Versus Hurricane Katrina in 2005, Dolly's impact on oil supplies is expected to be small but that doesn't stop traders from bidding up oil prices "just in case" their expectations are wrong. For instance, oil prices rose almost 2 percent Monday as Dolly drifted into the Gulf. Oil prices ...

The phrase "Consumer Price Index" can be intimidating and unclear to Americans. It's an economic term, after all, and not a part of everyday American language. It even has its own abbreviation to add to the confusion -- CPI. So, when a layperson hears that "CPI is rising", it's not always clear what it means. The tendency, therefore, is to ignore the news. This is one reason CPI is commonly substituted with the more down-home expression of "Cost of Living". In contrast to the term "CPI", the phrase "Cost of Living" is a lot more clear. When people hear that the Cost of Living is ...