Newspaper Page Text
PAGE 6A
FORSYTH COUNTY NEWS-WEDNESDAY, NOVEMBER 29, 1989
Banks aren’t keeping up with the feds declining interest rates
By John Hielscher
New York Time* Regional Newspapers
SARASOTA, Fla. Declining in
terest rates may be welcome news for
borrowers, but savers are watching
their deposit rates slip away.
Short-term interest rates on certifi
cates of deposit, while paying more on
average than long-term deposits, will
likely move down more than long
term accounts if a recent drop in the
prime lending rate becomes the norm
in the industry.
“The Federal Reserve is clearly
leading the way on this one,” noted
the 100 Highest Yields publication in a
recent issue. “Even without reducing
Business Week Profile
Affordable homes by Country Homes
Country Homes is the Gainesville
based builder of residences that are
attractive a most importantly
affordable.
“My idea is to offer everyone a
home than can afford to buy, one that
they are satisfied with,” said owner
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its discount rate, it has suggested to
financial institutions that lower rates
are called for.
“However, banks have been slow to
drop their lending rates, especially
those on consumer credit, such as per
sonal loans and credit cards. That’s in
sharp contrast to early this year,
when banks were leading the way in
the Fed’s anti-inflation campaign.”
Generally, institutions are paying
slightly better for short-term deposits
but less for longer-term accounts
compared with the beginning of the
year As of last week, for example,
Goldome was paying 7 percent on a
money-market account; at the begin
ning of the year, the account paid 5.3
Phil Kinsey. “Everyone ought to be
able to have their own home.”
Country Homes is located at 2654
Browns Bridge Road in nearby Hall
County.
Kinsey, now 51, didn’t open his busi
$ 43,900
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New Model Homes
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by PHIL KINSEY
DAWSONVILLE
POOL ROOM
Dawsonville, GA
percent. But some of Goldome’s long
er-term rates are lower: 8.12 percent
for 1-year CD last week compared
with 8.4 percent in January.
Others show the same trend. Great
Western Bank’s money market ac
count was up to 7.45 percent last week,
compared with 5.6 percent in Janu
ary. California Federal’s 5-year CD
was 8 percent last week, down from
8.7 percent in January. Citizens and
Southern was paying 8.05 percent last
week for a 1-year CD; the rate was 8.7
percent at the beginning of the year.
In a Nov. 8 survey, 100 Highest
Yields found these average interest
rates nationwide: 6.4 percent for mon
ey market accounts, 8.16 percent for
“Everyone ought to be
able to have their own
home.”, said Kinsey.
ness without first paying careful at
tention to what he was doing. He had
spent several years as a building con
tractor. During those years he spent
careful attention to detail.
“I covered more stuff than most
people have ever seen,” said Kinsey
about the early days.
Then over 10 years ago he made the
decision a quality home could be built
at a reasonable price.
That first year he built 10 homes, of
which nine were sold before actual
completion. Last year that number
had increased to 50 homes.
This year the number will be about
the same.
“We’re going to stay around that
figure,” said Kinsey, citing quality
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6-month CDs, 8.21 percent for 1-year
CDs, 8.63 percent for 2.5-year CDs,
and 9.57 percent for 5-year CDs. The
quotes for 2.5-and 5-year CDs are av
erage annual yields, however, not
stated interest rates.
Average lending rates nationwide
in. early November were 9.53 percent
for a 15-year fixed-rate mortgage, 9.75
percent for a 30-year fixed mortgage,
8.49 percent for a 1-year adjustable,
12.16 percent for a new car loan, 17.1
percent for unsecured personal loans
and 18.63 percent on credit cards.
“Borrowers won’t see any relief for
some time,” 100 Highest Yields said.
“Personal loan and credit card rates
have actually risen slightly in the past
worksmanship as the reason. “I want
all the homes to have my personal
touch. If we built more then I couldn’t
have a hand in them.”
One key to their success is they al
ways use the same crews, a move
which insures standard workman
ship. Their homes are Good Cents
Homes, a move which means Country
Homes is concerned about energy uti
lization. They strictly adhere to insu
lation levels of R-30 in the attic, R-ll
in the floors and a minimum of R-19 in
the walls. Kinsey also prefers wood
primary windows and metal storm
windows.
Kinsey and his sons, Keith and Ran
dy, build homes in the $40,000
$130,000 neihborhood. Individuals
don’t have to wait long after selecting
plans from Kinsey’s bulging book of
plans (250).
“We try our best to have a home
ready in 90 days,” said Kinsey, “I’ve
always felt there is no good reason
why a good quality home can’t be
bought at a reasonable price.”
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seven months, and are always slow to
fall. Auto loan rates may come down,
but only if new-car sales continue to
take a beating and automakers push
incentives.
“Mortgage rates should continue to
decline, but not directly because of
the prime. Home loans are more con
nected to 36-year Treasury bonds,
whose yields should sink as the econo
my slows and home sales ecline. Bor
rowers should sit back and wait until
the downward trend hits bottom, pos
sibly in late winter.”
Smart savers are taking the time to
check out the health of a bank or sav
ings and loan. In addition to the pri
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vate services that provide financial
details about institutions, the federal
government is now issuing some in
formation about banks and S&Ls.
You may need some experience in
reading financial reports, but the in
formation should be readable enough
to tell you if the company is healthy or
in trouble.
The Resolution Trust Corp. prints a
list of thrifts that are in the conserva
torship program or in receivership
under the Resolution Trust Corp. For
a full list, write to Resolution Trust
Corp., Communications Department,
550 17th St. N.W., Washington, D.C.
20429.
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