Mortgage Rates Head Down

After reaching a peak in late December, mortgage interest rates have generally fallen.

Even the December high, about 6.8 percent for 30-year fixed-rate loans according to Bankrate.com, was low by the standards of recent years. In mid-February, financing was available at around 6.4 percent.

Ups and downs on Wall Street have contributed substantially to the trend toward lower mortgage rates. As investors question accounting techniques and profit reports, some are moving money into the bond market -- a movement which means lower rates for mortgage loans.

Home Sales Soar Nationwide

Here are the odds: Of 50 states, 40 saw rising home sales during the fourth quarter of 2001 -- the tough period following the September 11th terrorist attacks.

According to the National Association of Realtors, the seasonally-adjusted annual sale rate reached 5.92 million units in the fourth quarter, up 2.6 percent from the 5.77 million-unit level in the fourth quarter of 2000.

Sales of both new and existing homes reached record levels in 2001, and 68 percent of all households now own their own homes.

Why the strong sales? Interest rates fell nearly 1 percent when compared with 2000. The result, says NAR, was the highest affordability level in 27 years.

The association's First-Time Homebuyer Affordability Index shows a typical first-time buyer household, aged 25 to 44, with an income of $36,720, had 85.2 percent of the income needed to purchase a typical starter home with a 10 percent downpayment. The median starter home price was $125,800, during the fourth quarter, and the median-income first-time buyer could afford a home costing $107,200.

According to Freddie Mac, the average commitment rate for a 30-year conventional fixed-rate mortgage was 6.78 percent in the fourth quarter, down from 7.64 percent in the fourth quarter of 2000.

And what about the states where sales did not rise in the fourth quarter? Some were no doubt impacted by the events of September 11th, but for others the reason may be too little inventory.

Cell Phone Use Soaring

Cell phones use has exploded, and now the little devices are rapidly becoming as common as toasters. Figures from the Census Bureau show that we now have 110 million cell phone subscribers in the US -- up from 5 million in 1990.

Why so many cell phones? The battle for subscribers has produced low rates, in some cases making cell phones even competitive with traditional land lines. Moreover, as people increasingly commute and work from multiple locations, cell phones make workers available anytime, anywhere.

With the new interest in security, cell phones allow household members to stay in touch whether at home, at work, or on the road. And some school systems which had once banned the devices are now beginning to re-think the issue.

Cell phones are also impacting real estate. Need to reach your broker? Whether in the office or out, cell phones make brokers easily accessible, saving bother consumers and professionals time and inconvenience.

Speaking of Electronics...

If you've visited open houses recently you've no doubt noticed an increasingly-common scene: Computers in home offices, computers in dens, and computers in bedrooms. New homes are often wired with the future in mind, a future which includes even appliances connected to the Internet.

What you see in open houses reflects a national trend. The Census Bureau says that 66.8 percent of us now use a computer at home, school, or work. Among those who use computers, 80.6 percent have Internet connections.

As of last September, the latest period for which we have figures, Census says that 143 million of us were using the Internet -- 53.9 percent of our total population.

Is more computer growth possible? You bet. Computer usage is already higher in Sweden and Denmark, and it will increase here as well.

It used to be that homes had one telephone. Later they had one television and even a "TV room." Now computers are becoming so common that households with two and three units are hardly unusual.

Given the trend toward computers and the Internet, it follows that homes offered with multiple phone connections increasingly make sense in the electronic era.