Home & Garden TV to Auction Its First Condos in Los Angeles
NEW YORK ( MainStreet) Four condominiums that were designed by participants in a new Home & Garden TV show are being sold in a televised auction in Los Angeles this month. The sale of the condos could be abetted by the fact that down payment percentages for 30-year fixed rate purchase mortgages declined to 15.78%, according to a report released by Lending Tree.
"Relaxed lending guidelines translates to a larger pool of qualified homebuyers that could boost the housing recovery," said Doug Lebda, founder and CEO with LendingTree. "While lenders still need proof that a borrower has the financial ability to repay the loan, lenders have started to accept lower down payments and credit scores from potential borrowers."
California is among the top ten states with the lowest average down payment percentage for a 30-year fixed rate conventional loan. Other states in the ranking include New Jersey, New York, Connecticut and Hawaii.
"Down payment and rates are the same throughout Los Angeles County and for most of California," said Rhett Winchell, president of the Kennedy Wilson Auction Group in Beverly Hills. "Interest rates are still historically low if you look at the past 35 to 40 years."
Whether other homes featured on HGTV real estate TV shows will make it to the auction block in the future is unclear "We don't know if this approach will be repeated beyond this series," said Winchell, who declined to name the title of the new TV show.
For now, the four renovated two-bedroom custom HGTV homes that are up for grabs were built on Sonora Avenue in the city of Glendale and have private patios with gas barbeque, a one car garage and a community pool with guest parking.
"We are offering 30-year fixed rate conventional loans with as little as 5% down at current market rates for qualified buyers to allow as many people the opportunity to buy as possible," Winchell told Mainstreet.
The average 15-year fixed mortgage rate climbed to 3.54% versus 4.47% for jumbo 30-year fixed mortgage rates.
"The two primary reasons interest rates have generally been on the rise are the reduction in the Fed's bond buying program and improvements in inflation and employment.," said John Dragone, managing director with Terrace Capital in New York. "The Fed also set a target rate of 2% for inflation, which is currently 1%. This provides considerable latitude on the Fed's part for promoting a low interest rate environment."
While the Fed has generally indicated it will keep short-term rates near zero into next year, investors are concerned after Janet Yellen's first conference that increases may be in the works sooner than expected. Yellen is the new chair of the board of governors of the Federal Reserve System.