Smart Real Estate Investing

Canada's MLS residential home sales soared to a record-high of 456,503 closed transactions in 2004, a 4.8 percent gain over 2003, according to the Canadian Real Estate Association. It was the fourth consecutive year in which national sales surpassed all previous annual records.

Annual sales records were set in Newfoundland, Prince Edward Island, New Brunswick, Ontario, Alberta and British Columbia. New listings reached their highest level on record on an annual basis, the association reported. At 716,201 units, new listings in 2004 surpassed their previous record set in 1990 by 1.1 percent.

The national MLS average price set a record in 2004, up 9.7 percent from 2003 to $244,304. This was the fifth consecutive year in which the national average price set an annual record. For December, seasonally adjusted existing-home sales via Canada's Multiple Listing Service slowed 1.3 percent from the previous month, but set monthly records in New Brunswick and Alberta. The national MLS average residential price also set a monthly record in December, reaching $234,971. The year-over-year increase of 11.1 percent in average price in December was its largest since May 2004.

An increase in new listings and a return to a more normal pace of sales activity are expected to cause Canada's resale housing market to become more balanced in 2005, which will keep the size of average price increases between 3 percent and 5 percent, the association reported.

Predictions of a "global house-price bubble" are intensifying, according to ResearchWorldwide.com, a real estate information portal.

The company cites common threads linking "the rising tide that lifts all boats" in housing markets worldwide. Homeowners have experienced the lowest real interest rates worldwide in many decades, a low rate of inflation, and lackluster equity and bond market performance, for example. These factors have contributed to rising house prices, followed by asset growth and, occasionally, by profit taking, the company reported.

"Conversely, there are common denominators, which could cause the unraveling of the global housing boom," ResearchWorldwide reported this month. "A major economic or political shock, such as soaring oil prices, a significant interest rate hike, or the outbreak of a major war could negatively affect homeowners' confidence levels."

A severe hike in U.S. interest rates could damage the U.S. and global economy, the company noted. "An alternative U.S. government strategy may be the introduction of a 'patriotic' consumption tax to reduce consumer spending, making imports more expensive and less affordable for U.S. consumers, thereby ultimately increasing the value of the U.S. dollar. This pro-active stance may restore some confidence in the U.S. dollar, encourage higher foreign capital inflows and keep worried foreign investors at bay," predicts ResearchWorldwide.com.

"If U.S. interest rates do not rise substantially in 2005 then U.S. homeowners' major asset – their homes – may not see a fall in value. Over time, U.S. house prices and global house prices would then adjust to local supply, demand and affordability conditions, avoiding a bursting bubble scenario," the company also predicts.

The "bubble" will not necessarily burst, instead the "surplus air can be deflated" via local market adjustments, ResearchWorldwide stated. "The inefficiency and imperfection of residential markets in countries worldwide could enable realistic adjustments in affordability and price to take place at local levels. As prices rise, more home buyers will be forced down the affordability pyramid. They will move to less desirable, but more affordable, locations and trade down on their levels of expectation. They will adjust to, and accommodate at, a local market level."

There will probably be casualties in local residential markets worldwide – especially at the oversupplied investor market level, the company noted. "However, these smaller localized bubbles may burst without unduly affecting the larger local market conditions."

ResearchWorldwide.com created a Worldwide House Price Indices Performance Ranking 2004 that shows the rate of increase in house prices. Ten countries experienced a rising rate of increase in the second half of 2004: Belgium, Canada, China, France, Hong Kong, Israel, Norway, South Africa, Sweden and the United States. Meanwhile, 10 countries also saw a slowing in the rate of increase in house prices during the second half of 2004: Australia, Finland, Ireland, Italy, Japan, New Zealand, Spain, Switzerland, The Netherlands and the United Kingdom.

South Africa: South Africa, the best performing country in ResearchWorldwide.com's 2004 rankings with a 32.6 percent increase in house prices, long suffered from political uncertainty, which caused reduced demand from 1984-1999. The housing market in South Africa took off strongly in 2000, six years after the first democratic elections took place in 1994. During the boom phase since 2000, South Africa has experienced a 17 percent per year rise in house prices in nominal terms, and 11 percent per year in real terms.

Hong Kong: Hong Kong house prices collapsed by more than 50 percent in the 18 months following the mid-1997 handover of the former British Protectorate to China. "Although confidence returned from August 2003 onwards, the recent 45 percent increase (in house prices) is still well below the peak achieved in early 1997."

Hong Kong, in second place in the ResearchWorldwide.com 2004 rankings with a 27.2 percent rise in house prices for the year ending November 2004, still has plenty of steam left in its 'catch up' phase. Its strategic location as a user-friendly city into the lucrative and fast-growing Chinese economy is a relatively new demand driver.

United Kingdom: The United Kingdom market has experienced a significant slowing in the rate of increase in house prices since July 2004. Using mortgage provider Nationwide's statistics for the first seven months of 2004, the rate of increase was 11.4 percent, but since July 2004 prices have only increased by 1.2 percent.

This slowing down in the rate of increase in house-price patterns should be experienced in a number of countries during 2005, ResearchWorldwide reported. Other countries already experiencing a slowing rate of increase in house prices include Australia, Finland, Ireland, Italy, Japan, New Zealand, Spain, Switzerland and The Netherlands.

Some countries still experiencing upswings in rates of house-price increases, such as Belgium, Canada, China, France, Hong Kong, Israel, Norway, South Africa, Sweden and the United States, will likely see peaks being reached during 2005 and slowing rates of increase in house prices being reflected as 2005 unfolds, the company also reported.

"Providing no major interest rate increases or other macro shocks occur during 2005 and providing local market knowledge and information is shared to enhance responsible real estate decisions, then the air can slowly be let out of the bubble," the company reported. "Housing markets in various countries worldwide could experience a slowing down in activity with adjustments being made at local levels, which would enable demand and supply to approach reaching an equilibrium at realistically affordable levels."

Nine Strategies For Growing Your Home Renovating Business

I have become financially independent renovating houses, and you can do the same; however, if you aren’t prepared, the process can become completely overwhelming. To help you avoid the pitfalls that are out there, I have developed nine key strategies to assist you in growing your house renovation business. If you are willing to learn from my experience, you will enjoy greater success much sooner.

While I was able to renovate 17 homes during my first year in the business, by employing the following strategies, I have grown my business to the point that I can, in today’s environment, renovate 40-50 houses per year. Keep in mind that I do an average of $26,000 to $50,000 worth of repairs to each of my houses, so these are not quick carpet and paint jobs.

Here are the nine key strategies to help you take your house renovation business to the next level.

Key Strategy #1: Develop The Ability To Take Action Quickly.

One of the most important elements of my success is my ability to take action quickly. In my area, the competition is tough, and if I procrastinate I will lose deal after deal.
If you want to “steal” a house, you’re going to have to be able and willing to act quickly when a good deal presents itself. If I go and look at a house that I feel is a good deal, I write an offer immediately; get to the point where you are able to do the same.

Key Strategy #2: Learn How To Find And Handle Contractors.

Learning this skill will save you money, time, and heartache. I used to allow contractors to move very slowly, and I would accept their excuses. No more! I currently have up to twenty workers on my job sites, and the renovation process on my investment properties is very smooth because I have learned to handle contractors well.

The first important element is finding quality contractors. Some of the best ways to get good referrals are to ask friends and relatives for recommendations, call your local building inspector, or attend the local REIA meetings and network with the big players in your community.

Do not give contractors much money up front. Until you are able to do a large volume, you may have to give them some money, but always give them as little as possible until some of the work has been completed. Knowing they have money coming gives them sufficient motivation to show up at your job site and do a quality job.

The last thing to remember in dealing with contractors is this: don’t be afraid to fire a bad one. Simply let the contractor know that you are not satisfied, settle up on the spot, and call one of your back-up contractors to start as soon as possible.

Key Strategy #3: Develop A Sound Educational Plan.

I started out in this business knowing nothing about renovating houses, so consequently I enrolled in Hard Knocks University. Now, with all the materials and home study courses out there, there is no reason for anyone to start this business blindly. I still go to seminars and buy books and tapes. I try to read one good book by a millionaire every month, and I listen to audio tapes daily to attempt to improve myself.

An investment in education is the greatest investment you will ever make, so you need to develop a sound educational plan to help you achieve your goals. Plan to spend one hour each day increasing your real estate knowledge base or improving yourself. In two to three years, you will see a huge difference in who you are and what you have accomplished. Always strive to better yourself!

Key Strategy #4: Obtain Access to Private Capital.

Growing my business to the point where I am able to renovate over 40 houses per year did not happen by accident. Using a hard money lender is what took me to the next level, and private capital can do the same for you.

Anyone who has completed one or two rehabs can tell you that they become very capital intensive. If you do not have a private source of money, these funds must come directly from you. You need to find a source other than your bank account for the funds to purchase and renovate your houses. Whether this money comes from a hard money lender, a line of credit, or a private lender, the sooner you find a good source of funds, the sooner you can accelerate your business.

Key Strategy #5: Develop An Efficient Office System.

If you want to increase the number of houses you are able to renovate, you must develop an efficient office system. I can’t be involved with every aspect of buying and selling 40- 50 houses per year, so it is important for me to have an efficient system in place that allows me to maintain my business at that level.

My focus is on buying houses and cash flow; everything else is delegated to members of my staff. I realized that I was worth too much per hour to be handling menial tasks. I am much more of an asset to my business when I am out locating deals and managing my cash flow. I delegate everything else to good people in my office: answering phones, accounting and bookkeeping, maintaining office supplies, dealing with contractors, and placing standard orders.

You will not be able to develop a system like mine all at once, but it is important to start piece by piece. Add one person at a time as you can afford the payroll, and watch your business grow.

Key Strategy #6: Learn How To Estimate Your Own Repairs.

When I am interested in a property, I go out and estimate repairs personally, and I recommend that you do the same. If you don’t know how, learn. By relying on someone else to estimate repairs, you are putting your profit in their hands. They will not lose one minute of sleep if they miss a bad furnace that eats up $3,000 of your profit.

Just as I do, I recommend that you bring a repair sheet with you to each property you inspect. Write down each repair and the estimated repair cost. After you add up all the repairs, add an additional 10% contingency to allow for anything you may have missed or underestimated. You should also allow an additional $2,000-3,000 for additional niceties and upgrades that will help sell your house. Ensure your houses will be gorgeous when they’re done by planning for these items in the budget ahead of time.

Beginning investors will often underestimate the repairs and will borrow $4,000-5,000 less than what will be needed to do a quality job. If you underestimate, you will be forced to cut back on important areas of the renovation process such as the kitchen and bath. It is much better to overestimate and lose a deal than to underestimate and have a low-quality rehab that you are unable to sell.

Key Strategy 7. Do Quality Work.

This may sound like a simple concept, but I have seen some students’ homes turn out looking as bad as when they started.

Today’s buyers are smart, and if they see that you have skimped on the carpet, vanities, and kitchen cabinets, they may get worried about the quality of the more expensive items: furnaces, roofs, and the foundation. On the other hand, if your house is gorgeous, it alleviates the buyer’s fears about these bigger items.

Most buyers don’t have much money left over after purchasing a new home. They want to know that they won’t have to replace a furnace or fix a structural problem two months down the road.

It is better to spend a little extra money on renovations to assure your house is top quality and will sell quickly. In the end it is actually cheaper since buyers will move quickly if your house is pristine, and you won’t have to carry your house for 6-12 months.

Key Strategy 8. Get Your Real Estate License.

My real estate license is one of the most critical tools I have. It allows me access to a world of properties that I would otherwise be unable to find. I search the Multiple Listing Service (MLS) two or three times every day looking for brand new properties. If there is a good deal, I don’t have to wait for a Realtor to call or fax me; I can be in my car looking at the property immediately.

Not only can I find my own properties, but I can also do my own comps rather than relying on a Realtor’s opinion. When you are figuring how much you can offer, it is important that you know what a house will sell for when completed. You should not rely on a Realtor who is trying to convince you that the house is a good deal. A house is only a good deal if your numbers tell you it is. By getting your license, you won’t have to rely on someone else to do comps for you.

Key Strategy 9. Develop A System To Sell Your Houses Quickly.

The last strategy is selling properties at lightening speed. Buying a house at the right price and renovating it properly are two important steps, but to realize a profit you must be able to get buyers qualified and get to closing quickly. The faster you pull your money out of a property, the faster you can reinvest it in additional properties.

Finding a good mortgage broker is one of the most important aspects of selling your houses quickly. The mortgage broker I use is the most critical team member I have. She has thirteen years experience and closes between 25 and 35 deals every month.

It is very important to find a top quality loan officer who deals heavily in first-time home buyers. When you are looking for a mortgage broker, ask them the following questions: how long have you been a mortgage broker, how many deals do you close each month, and what kind of mortgages do you focus on? By asking these questions you will screen out the people you don’t want on your team and identify those you do.

There is nothing worse than taking your house off the market for two months and then finding out the buyers could never have bought it. By pre-screening buyers and using a quality loan officer, you will totally eliminate this problem. When I take a house off the market, I know it will close. Spend a little more money on marketing to attract “A” credit buyers to help accelerate your house-selling machine.

In conclusion by implementing these nine basic strategies, you will develop a more profitable and efficient real estate business. I wish you and your business much success in the coming years.

by Robyn Thompson

Robyn Thompson owns and operates Home Buyers, LLC, a real estate investment company which specializes in purchasing, renovating, and selling single and multi-family homes in and around Waterbury, CT. Under Robyn's direction, Home Buyers LLC has grown phenomenally over the last few years. Robyn Thompson has purchased 50 homes in 1998. In 1999, only her fourth year of operation, she will purchase 52 homes! Robyn cashes out 97% of her houses to "A" credit buyers in record time. She has made retailing a science and knows every technique imaginable to reduce rehab time, minimize holding costs, attract and qualify good credit buyers, and expedite closings!

To get more highly useful information and help resources visit her website here : http://www.realestatepromo.com

Economic confidence among affluent Americans regarding the overall state of the economy rose seven points this quarter, following a significant, 13-point decline last quarter during the 2004 election season, according to the latest quarterly McDonald Financial Group Affluent Consumer Confidence Index results, released today. This represents one of the largest quarter-to-quarter increases in two years.

As a result of their positive feelings about today's economy, affluent respondents say they plan to increase their spending and investing levels over the next quarter, with 30 percent of affluent Americans saying they would put more money in the stock market over the next three months. Thirty-two percent of business leaders polled say they plan to increase hiring levels over the next three months, a 15-point increase from last quarter. However, while the current picture appears quite positive, affluent consumers still have concerns about the future of the economy due to a number of issues facing the country such as Iraq, a perceived real estate bubble and the national deficit.

Now, with the election decided, solid GDP growth and stock market gains in the last quarter of 2004, affluent Americans again appear to be very confident about the current state of the economy. Unlike previous quarters, when confidence has not necessarily translated into higher spending and investing intentions, in this quarter larger numbers of affluent Americans say they both feel more confident and plan to take action."

The percentage of those who say they would invest more of their assets in the stock market this year than last year jumped six points to 23 percent, up from 17 percent last quarter. Intentions to make home improvements increased by seven points to 21 percent since last quarter. Plans to purchase a second home in the next three months are up five points since last quarter to 10 percent, the survey found.

Thirty-two percent of business leaders – who represent 43 percent of those polled in the survey – say they plan to increase hiring in the next three months. This represents a 15-point increase from last quarter, when 17 percent said they would increase hiring. Business leaders are defined in the survey as those who own their own businesses or are senior-level executives.

Although overall economic optimism has significantly improved since October and has returned to near all-time high levels, some doubts remain among affluent Americans about the future of the economy due to several issues facing the country.

The McDonald Financial Group Affluent Consumer Confidence Index – a quarterly measure of market sentiment – is based on a national survey of randomly selected individuals with investable assets of $500,000 or more, and/or personal annual income of $150,000 or more.

With mortgage rates at all-time lows, it may be time to consider looking into getting that addition put on your house, or finally remodeling your kitchen or adding that additional bathroom. Homeowners who want to begin major home improvement projects may be able to finance those projects using the equity in their homes. You can tap into your home equity or cash out by refinancing your home for more than the balance that you owe on your old mortgage. And because mortgage rates are so low, you may be able to do it without a significant increase to your monthly mortgage payment.

Let’s say you want to add a small addition onto your home, and the project is going to cost you a total of $20,000.00. If you currently have a mortgage of $100,000 being financed over 30 years at eight percent interest, your monthly payment is approximately $970 per month. If you refinance at 6.5% interest, and add the $20,000 into your refinance, bringing your new mortgage balance to $120,000, your monthly payment will only go up approximately $25 per month. Better yet, if you refinance at 5.5%, your monthly payment will actually decrease.

If you have already had the addition added to your home, but you paid with a credit card or another high-interest loan, you may still want to look into refinancing. You can take the cash proceeds from the refinance and pay off the high-interest loan that you took out to build the addition. You will eliminate the monthly payment for the high-interest loan and the interest paid on the refinance may be tax deductible.

Even if you are planning on selling your home, that is even more of a reason for you to take advantage of this opportunity. Some home improvements will add more value to your home than the cost of the improvement itself, bringing you a better price for the home when you sell it. Certain remodeling projects like kitchen redesigns and bathroom additions are examples of this, and they make the home easier to sell.

Written by Craig Romero/Mortgage Analyst

Craig Romero is the well know author of Mortgage Cycling Revealed. To discover how to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less without making biweekly mortgage payments. Click on his famous book title to visit his website and get more information.

The nation's home builders expect the housing market to remain strong in 2005, as a growing economy helps offset the impact of slowly rising mortgage interest rates, according to the National Association of Home Builders/Wells Fargo Housing Market Index released today.

Builders are geared up for another solid year and expect the demand from home buyers to remain resilient. Somewhat higher mortgage rates is expected, but they will still be at reasonably affordable levels to accommodate families who are shopping for a new homes.

The NAHB/Wells Fargo Housing Market Index is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Builders report current sales of single-family homes, prospects for sales in the next six months and traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that a majority of builders view sales conditions as favorable. Positive trends in employment and household income will buoy housing demand this year, according to NAHB Chief Economist, although builders will have to contend with rising interest rates and, in some markets, high housing prices that impact housing affordability. "Following a record year for home sales and single-family starts, the balance of forces is likely to take a modest toll of 3 percent to 4 percent this year," he said.

All three components of the index were off slightly in January, but remained close to the peak levels of last year: current single-family sales declined to 77, down from 78 in December; sales prospects for the next six months dropped from 80 to 78; and buyer traffic went from 52 to 50.

Regionally, home builders were most confident in the West, with an overall seasonally adjusted reading of 81. That was followed by the South, at 75; the Northeast, at 65; and the Midwest, at 55. The Midwest has been relatively weaker than other regions of the country because of sluggish job creation in many of its major employment centers.

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Overall home sales processed through the Multiple Listing Service of Long Island Inc. in 2004 have surpassed the previous record set in 2003, according to the West Babylon, N.Y.-based organization.

There were a total of 32,421 existing-home sales in 2004, up 13.4 percent from the previous record of 28,583 in 2003. The year ended with a reported sales volume of $14.4 billion for Queens, Nassau and Suffolk counties combined, reflecting a 27 percent increase over the $11.3 billion reported in December 2003.

Housing inventory as reported by MLSLI was 8 percent higher at the end of December 2004 as compared to December 2003, with 13,398 available residential properties throughout Long Island, which also includes Queens.
The average existing-home price for Long Island as reported by MLSLI for all of 2004 was $444,149, up 12.9 percent from 2003 when the annual average home price was $393,425. In 2002, the average Long Island home price was $344,660.

Existing-home sale prices in Suffolk County increased 12.7 percent in 2004 to an average price of $402,373. In Nassau County, home prices were 12.9 percent higher than a year ago, with a reported average price in 2004 at a record setting $541,443. Queen's home prices rose 12.5 percent in 2004, with the average sale price reported at $376,670.

The MLSLI president said, "2004 was one of the best we've had in a long time." and "Looking ahead at the signs of an improving economy, I believe we will see another strong performance in the housing market in 2005."

The Twin Cities, Minn., housing market posted record sales in 2004, with 58,233 units sold, an increase of 3 percent compared to 2003, according to figures compiled from the Regional Multiple Listing Service of Minnesota Inc.

The 2004 median home price combining all 12 months' activity was $215,900, an increased of 8 percent as compared to 2003. The median price has remained stable for the past seven months, averaging in the $220,000 range.

The president of the Saint Paul Area Association of Realtors, said, "If you purchased a $150,000 home in 2000, just four years ago, it would be worth $211,700 today, a 41 percent increase in value over the four years."

New listings totaled 97,737 units last year, a 13 percent jump compared to 2003.

More than 17,000 members representing all aspects of the real estate industry serve the Twin Cities market through four Realtor associations.

Mortgage Cycling Mortgage Reduction Second mortgage Home mortgage Refinancing mortgage unveiled

Did you know it's possible to build a minimum of $40000 in home equity, and pay your mortgage off in 10 years or less without making biweekly mortgage payments.

No matter how you look at it, your home is never a positive investment unless you build equity into it. Without equity your home is considered a debt. It's that plain and simple. Don't wait for 10 or 15 years to build equity through your monthly payments...Use Mortgage Cycling to quickly build the valuable equity you need to make your home a true investment.

Learn more on Mortgage Cycling - Mortgage Reduction - Second mortgage - Home mortgage - Mortgage refinancing and how you could profit from this invaluable information.

Long-term mortgage rates fell further this week, according to Freddie Mac's weekly mortgage survey.

Freddie Mac reported that the 30-year fixed-rate mortgage averaged 5.74 percent for the week ended today, down from last week when it averaged 5.77 percent. The average for the 15-year fixed-rate mortgage this week is 5.19 percent, down from last week when it averaged 5.21 percent. Points on the 30- and 15-year averaged 0.6.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.05 percent this week, with an average 0.5 points. Last week, the five-year ARM averaged 5.03 percent.

One-year Treasury-indexed adjustable-rate mortgages averaged 4.1 percent this week, with an average 0.6 point, unchanged from last week.

"The onset of 2005 bodes well for the housing industry. Long-term mortgage rates are currently below 6 percent. Although we expect mortgage rates to end the year a bit higher, they still provide a historic value to borrowers considering how over the past 30 years fixed-rate mortgages have averaged about 9.5 percent," said FM's Deputy Chief Economist.

One wrinkle in the forecast would be the emergence of unexpected inflation. At the end of this week and next, new inflation indicators will be released for the month of December. As it stands now, the market expects these releases to be tame, if not, mortgage rates are likely to rise more quickly in response.

Public Auction or Sheriff’s Auction


Public Auctions or Sheriff’s Auctions are not for the novice real estate investor. Generally they are the most risky time to purchase foreclosed property. This is not to say that they can’t be an overwhelming profit center. There is no doubt that auctions can yield major returns.

What happens at an auction is generally very similar in all states. Some states will auction the property in a courtroom and others will literally auction the property on the courthouse steps.

At an auction there will typically be a referee who handles the bidding. Most likely there will be a representative from the bank that is foreclosing, and there will be some investors present, and others just interested in what is happening.

The bidding at an auction will start at whatever is owed to the bank, plus legal fees. Like preforeclosures, auctions are a good time to buy property at below market value. Buying below market value will give you equity. I have seen properties sell for half price at auctions!

You can find great deals at auctions, but there are also many pitfalls, particularly for novice investors. One major obstacle with auctions is you generally need to pay cash, on the spot, for the property. This alone eliminates 95% of people from buying at auction.

Another drawback to auctions is that the homeowner is given a redemption period. Typically, the redemption period is six to twelve months. From the time the house sells at auction, the homeowner has the right to buy it back for what it sold for plus interest. This means you could buy a house at auction and might have to sell it back to the original owner during the redemption period. Additionally, if the homeowner does not move out at the end of the redemption period, it becomes your responsibility to remove the tenant through the eviction process.

Public auctions are very easy to find. Just call your local county assessor’s office and ask whom you need to speak to regarding sheriff’s auctions.

Author : Jeffrey Ringold

Jeffrey Ringold is the author of ‘How To Build A Massive Fortune Through Real Estate Foreclosures’. He is a licensed real estate agent and investor who has bought or sold over $12 million in real estate over his 7 year career. He is consulted by leading real estate developers and investors almost daily.

For more information on real estate investing and foreclosures, visit his web site and Learn more on How to Buy Foreclosures and Make Money

Mortgage rates around the country moved lower this week, marking a good start to a new year of home buying.

Freddie Mac's weekly survey of mortgage rates released Thursday showed that rates on 30-year, fixed rate mortgages averaged 5.77 percent for the week ending Jan. 6. That was down from last week's 5.81 percent.

For all of 2004, rates on benchmark 30-year mortgages averaged 5.84 percent, second only to last year's 5.83 percent, the lowest annual rate in Freddie Mac's record keeping. Low mortgage rates have powered home sales. Analysts believe sales hit a record high for all of 2004. The housing market is expected to post another good year in 2005, analysts said.

Long-term mortgage rates have remained well-behaved even as the Federal Reserve (news - web sites) has boosted short-term interest rates five times in 2004. That's because inflation, while creeping higher, is not currently viewed as an immediate danger to the economy, analysts said.

Some analysts believe rates on 30-year mortgages could climb to around 6.5 percent by the end of this year, which would still be considered low by historical standards. A few think rates could hit 7 percent.

Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, dipped this week to 5.21 percent, from 5.23 percent last week. For one-year adjustable-rate mortgages, rates fell to 4.10 percent this week, from 4.19 percent.