With the constant change in our industry, economy, and culture I have to say I spend plenty of time on the web. Pretty much every aspect of my job involves some need associated with the good ol' WWW. Much of my time is consumed by communicating via email, updating blogs (conradventi.com, blog.ventiscafe.com, and my family blog), and keeping up with friends, family, and business associates on social networks such as Facebook. The new way of online communication, also known as Web 2.0, allows business or people like myself to communicate with clients in an interactive fashion. Blogs are good examples of Web 2.0.
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Today the US Senate advances the new Stimulus Bill which includes an increase in the current home buyer tax credit. Currently a home buyer purchasing a home from April 2008 to July 2009 may be entitled to a tax credit up to $7,500. Currently the credit is to be paid back in increments of $500 each year thereafter. The new Stimulus Bill proposes an actual tax credit of 10% of the sales price with a maximum of $15,000. This provision may rid of the requirement to repay the credit, making it a true benefit for the home buyer.
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Consumer spending dropped 0.3% in September, the largest decline in four years. July and August showed no change in spending. The standstill and slide in recent months represents the purchasing activity of US consumers.
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Filed under financing by Conrad
I had an interesting conversation with one of my family members today regarding current state of available mortgages. Dino Venti owner of Venti's Cafe in downtown Salem has been building his loyal clientel for nearly 13 years. When you step into Venti's you feel a sense of community among the regulars – it definitely has that "Cheers" type of atmosphere. Having the face to face contact with customers nearly every day for the past 13 years, Dino has established many friends and acquaintances in the Willamette Valley.
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Today the Federal Reserve, the European Central Bank, the Bank of England, and the Swiss national bank announced they will lend an unlimited amount of funds to commercial banks in an effort to revive the financial markets worldwide. The Feds lead the way in the unprecedented event that backs the governments recent intervention.
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A couple of weeks ago I mentioned the FHA minimum down payment would be changed to 3.5% effective October 1, 2008. The Department of Housing and Urban Development (HUD) has postponed the change to FHA minimum down payment until January 1, 2009. So for now, the down payment remains at 3%.
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Today the Federal Open Market Committee unexpectedly lowered the federal funds rate by 50 basis points (.5%) to 1.5%. Several central banks from around the globe also reduced funds rates by 50 basis points in an effort to restore some confidence in the markets. The prime interest rate will be reduced to 4.5%.
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The daily media focus on the economy has brought the "banking crisis" to the forefront of everybody's mind. The failure of several large players in the banking system including 158 year old Lehman Brothers and the largest savings and loan bank Washington Mutual, has undoubtedly proven struggles in our banking system. The congressional decision to pass the bailout plan will provide the much needed relief to the banks with a manageable recovery in sight.
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Today the Federal government announced a rescue plan after a historic week in our financial markets. Earlier in the week Lehman Brothers declared bankruptcy, Merrill Lynch was sold, and AIG was bailed out by the government. Central banks from around the world poured hundreds of billions of dollars into the banking system in hopes to calm the storm. Despite the surge of news and volatility in the financial markets this week, mortgage rates had little change.
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Tuesday the Federal Reserve Board met and left the federal funds rate unchanged despite the news of Lehman Brothers' bankruptcy and the buy-out of Merrill Lynch. The federal funds rate, which banks charge each other for over-night deposits, will remain at 2%. The prime interest rate will follow suit, remaining at 5%. Consumers are more familiar with the prime interest rate because the rates for home equity loans/lines of credit and credit cards are tied to the prime rate.
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