Chitownproperty

Federal Reserve Chairman Alan Greenspan said this week that homeowners can likely withstand a decline in home values because they have built considerable equity in their homes. But he and federal regulators warned against risky mortgage programs that may put some buyers in a difficult position if prices do fall. Interest-only loans or various adjustable-rate mortgages can put people at risk because they build little equity in their homes while exposing them to interest rate fluctuation.

Your credit rating is a crucial factor in determining the rate you can get for a home loan. CNN/Money offers these five tips for boosting your score:

• Pay your bills on time
• Keep balances low on credit cards
• Don’t open a number of new credit cards you don’t need
• Have credit cards, but manage them responsibly
• Closing an account doesn’t make it go away

From Sunday’s New York Times, an interesting analysis of the benefits of renting vs. owning in markets where the costs of buying a home can outstrip rental costs. Their findings contradict the old adage that renting a home is a waste of money for those who can afford to buy. By comparing the costs of ownership, including mortgage, property taxes, insurance, and repairs, with rental costs (rent, insurance, and a credit for savings), the Times found that in exceedingly expensive markets like New York and San Francisco, people can actually save money by renting. However in Chicago, where the costs of owning are still lower than renting, buying a home is the best investment.

One of the nation’s largest home builders is trying to simplify the buying process by adding all the amenities for one price.

Some home owners find that once they start remodeling one part of their home, the construction never stops.

New home construction fell for the second month in a row in August, signaling further that the housing market is cooling down. The Commerce Department reported that housing starts dropped 1.3% in August, after a 1.5% drop in July. Rates on 30-year mortgages also rose to 5.74% last week.

A couple trying to buy a home from its owner, none of which are represented by a realtor, find themselves exasperated. Read this quick Q&A about the pros and cons of saving money on a realtor’s commission.

The end of the real estate boom won’t happen at the same rate in every market across the country, but each local area has its own risks. This article from CNN/Money explains the effects of price corrections in different markets from recent history.

Talk about your misplaced priorities: A New Orleans real estate mogul told the Wall Street Journal, “I am bullish, very bullish on New Orleans,” presumably while wringing his hands with cartoon dollar signs in his eyes. He believes that the number of condemned commercial buildings in downtown NOLA will shrink the amount of available office space, thus increasing rents and hastening his descent into hell. Call this today’s proof that the real estate boom really has driven some people crazy.

At the turn of the 20th century, Prarie Avenue, just a few blocks south of the Loop, was one of the toniest streets in the country. Industry barons like Marshall Field, George Pullman, and Philip Armour called it home, but over the years the area fell out of favor. Now, amidst more development in the South Loop, Prarie Avenue’s legacy is being restored.