December 24, 2008

Mortgage rates are at record low!

Mortgage rates tumble to record low

Refinancing activity rises to highest level since boom year of 2003

30-year fixed mortgage rates chart
Latest interest rates
MortgageHome EquitySavingsAutoCredit Cards
See today's average mortgage rates across the country.
Loan typeToday+/-Last week
30-year fixed
5.37%
5.53%
15-year fixed
5.27%
5.26%
30-year fixed jumbo
6.96%
7.09%
5/1 ARM
5.88%
5.88%
7/1 ARM
6.06%
6.09%
Latest interest rates
MortgageHome EquitySavingsAutoCredit Cards
See today's average mortgage rates across the country.
Loan typeToday+/-Last week
30-year fixed
5.37%
5.53%
15-year fixed
5.27%
5.26%
30-year fixed jumbo
6.96%
7.09%
5/1 ARM
5.88%
5.88%
7/1 ARM
6.06%
6.09%
updated 1:35 p.m. CT, Wed., Dec. 24, 2008

Rates on 30-year fixed-rate mortgages fell to a record low for the second straight week, causing refinancing applications to surge to the highest level in more than five years, a month after the Federal Reserve pledged to channel billions to prop up the sinking U.S. housing market.

While homeowners around the country are taking advantage of historically low rates to refinance their loans, the opportunity isn't available to those with poor credit or little equity in their homes, and foreclosures are still likely to surge.

Freddie Mac, the mortgage company, reported Wednesday that average rates on 30-year fixed-rate mortgages dropped to 5.14 percent this week, down from the previous record of 5.19 percent, set last week. The rate was the lowest since Freddie Mac's weekly mortgage rate survey began in April 1971 and the eighth straight week of declines.

Mortgage rates started falling after the Federal Reserve launched a sweeping new effort in late November to aid the U.S. housing market by purchasing up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal HomeLoan Banks.

Last week, the Fed, aiming to free up lending and jolt the economy back to life, cut its keyinterest rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.

Meanwhile the Mortgage Bankers Association said Wednesday its application index surged 48 percent in the week ended Dec. 19 to 1245.5. Total applications and refinance activity were at their highest levels since July 2003, when refinancing boomed at the peak of the housing market.

More than 80 percent of applications came from borrowers looking to refinance into loans with more affordable rates, the trade group said.

The average rate on a 15-year fixed-rate mortgage dropped to 4.91 percent from 4.92 percent last week, Freddie Mac said.

Rates on five-year, adjustable-rate mortgages fell to 5.49 percent, compared with 5.6 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.95 percent, from 4.94 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year mortgages averaged 0.8 point last week, compared with 0.7 point for 15-year mortgages.

The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.6 point.

Meanwhile, with 2008 home sales falling to the lowest point in at least 10 years, housing industry lobbyists are pressing in Washington for further aid to the housing market. Homebuilders want tax credits of up to $22,000 for home purchases and subsidies that would bring mortgage rates to as low as 3 percent for the first half of next year.

"It's just a matter of some spark," David Crowe, chief economist at the National Association of Home Builders said Tuesday. "The consumer is looking for some signal that now is the time."

December 23, 2008

Tennessee ranks 15th in growth over year

Imagine if Pike County, KY., population 65,000 left the Bluegrass state and moved to Tennessee

That's equivalent to the increase in population Tennessee saw from July 2007 to July 2008, according to a U.S. Census report released Monday on the fastest-growing states.

Tennessee ranks 15th in the nation in year-over-year growth, up from 16th the previous year. The state's total population is at 6.2 million — 17th largest in the nation, a spot held for three years.

Eddie Garcia moved to Nashville more than a year ago from densely populated south Florida. He said he came to pursue a music career and enjoy the state's scenery.

"There is so much to do here," Garcia said. "There are mountains, there's different foods and, of course, there is music. Nashville is awesome. Other than the time zone difference, I enjoy it."

Nashville Gains Jobs

Even with the economic downturn, Nashville has shown some modest gains in employment, and the state's population growth will continue, said Garrett Harper, research director for the Nashville Area Chamber of Commerce.

"In a comparative sense, we're still favorable with the cost of living, job opportunities and quality of life," Harper said. "Over the long term, I think the trend will hold true. This is something we watch closely."

December 22, 2008

Interest rate cuts lead to surge in mortgage refinancing
Nashville Business Journal

The Fed have slashed interest rates in the past month to spur home sales. But instead, the cuts sparked a refinance boom that local lenders hope will re-energize consumer spending.

The home mortgage refinance application index tracked by the national Mortgage Bankers Association tripled during the last week of November, the largest increase since the group began tracking in 1990.

The surge has continued for the past three weeks, with some Middle Tennessee lenders reporting up to 80 percent increases in refinancing applications since rates dropped after Thanksgiving.

Last week, the number of refinance applications increased 98.5 percent over the same week last year, according to numbers released Wednesday.

Mortgage expert Steve Curnutte says it’s finally a chance for homeowners who used good financial judgment to see a benefit from the many tools the government has used to boost the economy.

“It’s finally helping high-credit borrowers,” says Curnutte, head of Nashville’s Finworth Mortgage LLC, division of Ins Bank. “It’s a small consolation prize, but it’s helpful.”

Interest rates have fallen to just above 5 percent for a 30-year fixed mortgage, and experts say they could drop further.

Gayle Kindig, vice president of mortgage banking for Regions Bank in Middle Tennessee, says someone who bought a home as recently as 90 days ago could refinance today and possibly lower their rate by 1 percent.

Bankers are urging consumers to snap up the low rates and not play the wait-and-see game.

“Rates can change by the hour,” says Kindig, adding that refinances are 70 percent of her bank’s loans this month, compared to 45 percent in November.

Brian Sellers Pitts, of Sellers Financial Group Inc. in Nashville, says his refinance applications increased 80 percent this month from the previous month, but he’s not sure how many consumers will complete the loan process.

“There is still a lot of apprehension, a lot of fear in the market,” he says. “A lot of people want it. People want to wait until it goes lower.”

Ross Kinney, senior vice president of mortgage advisory for Pinnacle Financial Partners, says refinances are 71 percent of all mortgage loans for the month, compared to an average of 47 percent for the year.

The refinance surge hasn’t spilled over into new home sales. Kindig, however, is optimistic that with so much inventory on the market and the low interest rates, home sales will begin to pick up.

Josh Malnofski, president of Malcap Mortgage, says low interest rates are not the only factor driving refinancing. Of the more than 66,000 subprime adjustable rate mortgages in Tennessee, nearly 1 in 4 are expected to reset within the next 12 months, according to the Federal Reserve Bank of New York.

Malnofski says his refinancing applications are up 30 percent this month, and with the average person saving $100 to $200 per month on their mortgage — money that could help Nashville’s economy.

“It will stimulate retail,” Malnofski says. “Typically people are not going to put that money in a savings account.”

First new house appears at Harlinsdale

Old farmhouse at park-side subdivision is under renovation

 THE TENNESSEAN • DECEMBER 19, 2008

    FRANKLIN — The romantic in Ty Hasty views Harlinsdale Manor as a "work of love."
    The pragmatist amends it to a "love-hate" relationship.

"When you do an old house or you do a development it's always worse than what you think it's going to be," said Hasty, a Brentwood-based developer. "But then you find little jewels and it kind of makes it all worthwhile. Now that we're starting to get some stuff finished out here it's starting to get fun."  Hasty's affection for his new Franklin development, Harlinsdale Manor, is unmistakable. There is a spring in his step and pride in his voice as he guides a tour of the 23-acre, 15-lot property that borders sprawling The Park at Harlinsdale Farm on Franklin Road at Spencer Creek.  As the development begins to take shape with the first two houses nearing completion, Hasty knows best that the project has been complicated, expensive and jeopardized during the past 18 months. Overriding the challenges is his belief that "there is nothing like it in Middle Tennessee," and the 10 available lots will be sold in a timely manner despite a soft housing market.  "This project is really unique to Franklin," said Hasty, principal broker and president of Great South Real Estate and Development. "The reason for it is it's the only residential development project in this town that is historically accurate and environmentally correct."  The development is in a Historic Preservation Overlay and will be composed of houses that complement the area's architecture — including an early 1800s farmhouse that is being renovated.  Harlinsdale Manor includes 15 acres of conservation meadow and environmentally conscious features such as rain gardens and gray water lines on each lot.  "Our goal would be that five years from now, when this is all built out, that people might drive through here and think that this neighborhood's been here for 100 years," Hasty said. "That's the feel we want."  Houses are subject to size restrictions: minimum 3,500 square feet and maximum 7,000 square feet. They must be built of natural materials such as stone, brick or wood. Designs require approval by the Harlinsdale Architectural Review Panel, as well as the Franklin Historic Zoning Commission.  Three designs are in the review stage, and another owner has a prepared design but is still choosing a lot.  "We didn't want to have boxes in here," said Hasty, who has lived in Franklin for more than 30 years. "We didn't want to build-the-biggest-thing-you-can-build in here. We looked around downtown Franklin, we made a lot of pictures of old houses down there and of the streetscapes in town, and that's what we want to replicate."

Lot sizes range from about one-third to three-quarters of an acre and are priced at $300,000 to $425,000.

Sense Of Place Sought

"The decisions they made were the right decisions," said Mary Pearce, executive director of The Heritage Foundation of Franklin and Williamson County. "It's what you want to see happen in town. Every house is not going to be as grand as those houses at Harlinsdale Manor. However, if they all could be as sensitive to the context which they're in, then our town continues to be set apart, and not Anywhere USA.

"In these tough economic times that is more critical than ever."

Franklin builder Bill Powell, an authority on historical homes who designed the first new house under construction in Harlinsdale Manor, lauded the development's authenticity.

"They're trying to focus on local architecture," Powell said. "In other words, houses that didn't land from some other country or some other region of the country. We're trying to build houses you might have seen around there 100 or 200 years ago."

Franklin architect Preston Shea wanted to be involved in the project once he and Hasty discussed the developer's vision. Shea serves as director of design for Harlinsdale Manor and chairman of the review panel. He also is a member of the city's historic zoning commission.

Shea has submitted two designs for review: a European farmhouse, for Hasty, and a stone vernacular farmhouse with gothic elements.

"The city of Franklin is known for its historic architecture and there's a real easy cohesiveness in all the buildings downtown, and for these to be respectful, if not completely spot on, is absolutely the right call," Shea said.

Nashville photographer John Guider is building to sell the first new house in the development: on Lot 1, due south of the modest entrance. He owned the centuries-old farmhouse next door and land before selling it to longtime friend Hasty for $2.5 million in May 2007, entrusting him to respectfully develop the property.

"He was the one that got it the best," Guider said. "It just raised my comfort level in being able to let it go. We talked a lot about design and shared a very similar vision for how it should be."

That vision included emphasizing aesthetics over volume and taking a minimalist approach to a parcel zoned for dozens of houses.

"Ty saw it to be more of a family community with just a select few houses," Guider said. "In a way he sacrificed his building potential to develop something beautiful. He would have made a lot more money if he would have put in 45 townhouses. The fact that he wanted to do something special, that was more important than just turning the dollar. . . . That takes a special person to want to do that."

Hasty rejected the first design for the development, which included 32 lots.

"It was just too tight. It just wasn't right. It would have been too small," said Hasty, who is developing a residential community for the first time after working exclusively in the commercial field. "It wouldn't have had the character that the historic farmhouse has. It would have destroyed that open feel that you have out there."

Huge Park Abuts Development

Harlinsdale Manor is surrounded to the south and the west by The Park at Harlinsdale Farm, a former training and breeding facility for Tennessee Walking Horses that was purchased by Franklin in 2004. Sixty acres were opened to the public for passive recreational activities in September 2007.

Pearce said Harlinsdale Manor is a "model of how you would like to see projects happen, where you have development and you don't erode community character. And then, of course, they saved the historic farmhouse."

Guider, who moved into a historic home in East Nashville after leaving Franklin, invested in Harlinsdale Manor as a show of friendship to Hasty and because of the property's special place in his heart. He is considering building a second house there.

"I wanted to build something that other people could see and be very comfortable with the development," said Guider, whose house is scheduled for completion in four months. "I wanted it to have that special house."

Powell and Guider are creating a showpiece in the 5,500-square-foot brick Federal. Powell is melding reclaimed items like fireplaces and oak doors with period-appropriate design features like 10-inch baseboards, crown molding and limestone headers and footers. The double-tiered porch is accessible from every room and offers views of Harlinsdale Farm's 200 acres and Civil War landmark Roper's Knob to the east.

"The fact that Bill and I have fine arts backgrounds got him excited because I was allowing him to create a work of art rather than controlling every little aspect," Guider said. "My contribution was to let him flourish as an artist."

The 3,500-square-foot farmhouse was owned by former Franklin mayor John B. McEwen at the end of the 19th century. It includes many of its original features, and Hasty is being diligent about keeping it authentic through the restoration.

"It's a fabulous house, and it's turned out to be just beautiful. We're very proud of it," Hasty said. "But I don't care what old house you restore, when you restore an old house take whatever you think is going to be the worst-case scenario and double it. There's things in those walls that you can't see."

At the Harlinsdale farmhouse, workers discovered a boarded-up root cellar — designed to keep produce fresh in pre-refrigeration days — that Hasty is turning into a wine cellar.

Hasty said the discovery was a "mixed blessing."

"It was like, 'Oh, this is so cool,' " he said. "But, it was like, 'Oh, my gosh. I am going to have to spend more money to bring it back.' I couldn't board it up anymore. It had to be restored."

Two years ago, Hasty had to pinch himself when plans for Harlinsdale Manor were approved on the first reading by the historic zoning commission and the Franklin Planning Commission.

Market Changed During Site Prep

By April 2007, all of the lots were sold, to individuals and builders for speculative houses. But, Hasty's decision to take a noninvasive approach to laying sewer lines underneath Spencer Creek delayed construction by several months and caused builders to vacate when the lots weren't ready by the fall of 2007.

"By that time the market had transitioned dramatically, between May and December . . . and a lot of those guys had inventory, they had other houses they had built to spec, that weren't moving," Hasty said.

It looked like the beginning of the end for Harlinsdale Manor.

"I should have been gone a year ago. Sold out. Finished. Done," Hasty said. "And I still get nervous about it sometimes."

Hasty credits his lender, Pinnacle Bank, for standing by him and chalks up his bad luck to the nature of the business.

"Anytime you get into development of any project that is substantial in nature, when you have roads and water and sewer and electrical and municipalities to deal with, you can do your best to project out a year or two all of the things you're going to run into," Hasty said. "But there's no way that you can see every hurdle that you may run into."

Hasty remains confident that Harlinsdale Manor will be a financial success and perhaps even a benchmark for future residential developments in the area.

"Anytime you have exposure in a soft market it's uncomfortable," Hasty said. "On the other hand, it's only 10 lots. It's not 300 or 400. I'm so blessed that I'm not involved in a project that has hundreds of lots that are just like everybody else's.

"I've got 10 lots that are very, very unique. So, I'm confident that eventually people will buy all the lots."

December 18, 2008

King's Crossing land has lay fallow for nearly a year

New builder to tackle project on Wikle Road
The Tennessean

BRENTWOOD — Norfolk Homes out of Ann Arbor, Mich., has been selected to build the homes at King's Crossing, a new subdivision in Brentwood.
Norfolk owner Kevin Belew said last week he expects to obtain his first building permits within the month and hopes to start building in January.
"We hope to have a finished model by the beginning of the second quarter," he said.
Off West Wikle Road, King's Crossing has had its infrastructure in place for about one year. Prescott Builders had been named as the homebuilder for the 39-house subdivision.
Now Norfolk Homes has signed on to fill King's Crossing, building homes designed with an eye for empty-nesters and families with older children, Belew said. He expects the sizes of the houses to range from 3,000 to about 4,500 square feet, with prices from the $600,000s to $1 million.
"Our plans will be informal for the most part with European, Tuscan and somewhat Southwestern styles," Belew said. "It will be a little less typical."
The homes will be built to attract "a buyer who will appreciate a nice, well-appointed home but does not necessarily want the mansion-size house," he said.
He added that he is planning on building homes with three to four bedrooms, but his floor plans are being designed with flexible uses, a feature that many empty-nest buyers like to see. "(With) one of our designs, we have a secondary bedroom that is set up to be either an in-law suite or it could be a two-bedroom and bathroom arrangement or it could be a study with one bedroom and one bathroom.
"We are not exclusively for empty-nesters, but we are focused on the empty-nester." Plans call for the homes to be single-story with optional second-story bonus rooms, he said.
"There is nobody this side of Brentwood that is able to offer that product," Belew said. "And we think that price point is being underserved in that particular area."
Norfolk Homes is new to the Nashville area. The company is also building a model in Smyrna and in the Belshire subdivision in Spring Hill.