Mortgage rates are expected to push higher after Tuesday’s surge in yields for 10-year Treasury notes and news that two Bear Stearns hedge funds that invested heavily in bonds backed by subprime mortgages may be near collapse.

The yield on 10-year Treasury notes hit 5.15 percent Wednesday — an increase of six basis points in 24 hours that could also push up mortgage rates.

Freddie Mac’s June 14 survey showed the rate on 30-year fixed-rate mortgages jumping 21 basis points in one week, to 6.74 percent, an 11-month high.

Going Cashless

Long ago, I received some very good advice about money from a local
frugal businessman. He and I were discussing living on $5,000 a year and
his first piece of advice was to carry no currency, no checks, and no
credit cards at all. I thought about it and realized that I had a cell
phone, a vehicle and the nearest help for a true emergency was minutes
away. What did I have to lose? I have been doing this for several years
now, and it has cut down on my impulse spending tremendously! On payday,
I fill my tank, buy groceries (with a single check I put in my purse
for that purpose) and pay the one bill I have each week. I also keep
enough cash at home to pay my daughter’s allowance and lunch money for the
week.
Brenda T. in Frederick, MD

Realty Investing Remains Strong
Commercial real estate investing continues to boom while fundamentals weaken, according to the National Association of Realtors. A record $157 billion was invested in commercial property, excluding the hotel sector in Q1 2007, which was up from $97 billion in Q1 2006. NAR expects property fundamentals “to remain basically sound,” but its analysis of individual sectors predicts that gains in average rents this year will decline from last year’s pace in all sectors except industrial, and that net absorption will drop in all sectors but retail. It also predicts that vacancy rates will increase slightly in office and retail, while they remain flat in multifamily and industrial.

You may have heard San Antonio real estate is hot.But despite housing prices that appreciated more than 10 percent last year, San Antonio still has a reputation for affordability.

Well, sure if you compare our median home price of $145,600 to other parts of the country. It’s well below the nation’s average median home price of $221,900 and certainly below such hot spots as Orange County, Calif., where the median home price is $709,000.

But what about the rest of Texas?

We wanted to see what you would get in eight Texas cities with a San Antonio median budget, starting with the Alamo City.

WASHINGTON — The major slump in the housing market is nearing an end and should not have a significant impact on the overall economy, Treasury Secretary Henry Paulson said Wednesday. 

Paulson refused to comment specifically on the market impact of troubles confronting two large Bear Stearns hedge funds that invested heavily in subprime mortgages - loans made to borrowers with spotty credit histories.

“We have had a major housing correction in this country,” Paulson said in an interview with a small group of reporters at the Treasury Department. “I do believe we are at or near the bottom.”