mortgage economy: Strong Job Growth In July Trumped By Credit Downgrade! - 08/11/11 08:16 PM
 
More Americans are getting back to work.
The latest Non-Farm Payrolls survey from the Bureau of Labor Statistics shows that 117,000 net new jobs were created in July, thumping analyst estimates and surprising Wall Street investors.
In addition, May and June’s originally-reported figures were both revised higher:
May 2011 was revised higher by 28,000 jobs June 2011 was revised higher by 28,000 jobs The national Unemployment Rate slipped to 9.1 percent.
The jobs report’s strong readings would typically be a boon to stock market and a threat to mortgage rates. This is because more employed Americans means more disposable income spent … (1 comments)

mortgage economy: A Simple Explanation Of The Federal Reserve Statement... - 08/09/11 08:19 PM
 
Tuesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The vote was 7-3 — the first time in 5 meetings that the nation’s Central Bank was non-unanimous and the first time since 1992 that the FOMC adjourned with as many as three dissenters.
In its press release, the FOMC had little good to say about the U.S. economy, noting that since its last meeting in July:
Growth has been “considerably slower” than expected Labor market conditions have deteriorated Household spendng has “flattened” The Fed also noted that … (1 comments)

mortgage economy: Mortgage Rates Drop After U.S. Credit Downgrade... - 08/09/11 08:17 PM
 
Mortgage rates continue drifting downward, despite — or because of — a ratings downgrade on long-term U.S. government debt. Standard & Poors issued a single-notch downgrade after Friday’s market close, from AAA to AA+.
Of the roughly $9.4 billion in publicly-held U.S. debt, 72 percent is long-term (i.e. with duration of 2 years or longer).
U.S. short-term debt was not downgraded.
When an entity — government, business, or other — is cited for a credit downgrade, it means that the risk of lending money to that entity has increased. In theory, higher risk should lead to higher borrowing costs and higher … (0 comments)

mortgage economy: Mortgage Rates Make New 2011 Lows! - 08/07/11 06:43 PM

Mortgage rates in California plunged to new 2011 lows this week.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the national, average 30-year fixed rate mortgage fell to 4.39% this week — the lowest 30-year fixed reading since November 18, 2010.
The 0.16 drop from last week is the largest one-week rate drop in more than 2 years, and, although the 30-year fixed remains above its all-time lows from November 2010, two other benchmark products made new records this week.
Both the 15-year fixed rate mortgage and the 5-year ARM are reporting lower than at any time in recorded … (3 comments)

mortgage economy: Home Sales Have Heated Up! - 08/04/11 03:37 PM
 
Home sales have heated up, according to the National Association of REALTORS®.
More homes are going under contract this summer than went during the winter or spring seasons. Many of these homes are scheduled for late-August/early-September closings. 
If your home is among them, plan ahead. 
Like for the rest of the U.S. workforce, Labor Day is a popular vacation time in the real estate, title and mortgage industries. Closings come together more slowly when the parties involved are on holiday. In addition, when issues arise, they are often slower to resolve because not everyone is “present”. 
Therefore, if you’re under contract to … (2 comments)

mortgage economy: Mortgage Rate Strategy For July’s Jobs Report! - 08/03/11 07:20 PM

At 8:30 AM ET Friday, the Bureau of Labor Statistics will release the July 2011 Non-Farm Payrolls report. Mark it in your calendar. If you’ve been watching mortgage rates fall to new all-time lows this week and fear a mortgage rate reversal, Friday could be the day.
The monthly Non-Farm Payrolls data can swing a big stick in mortgage markets.
More commonly called “the jobs report“, Non-Farm Payrolls details the U.S. workforce, providing sector-by-sector analysis of workforce, as well as the national Unemployment Rate. 
The jobs report affects mortgage rates because of how important jobs are to the U.S. economy.
… (2 comments)

mortgage economy: What Will The Debt Ceiling Agreement Do To Mortgage Rates? - 08/02/11 07:09 PM
 
The United States is projected to reach its legal $14.294 trillion debt limit today. The limit was set by Congress February 12, 2010. The U.S. Treasury may not issue new debt beyond the debt ceiling.
Since April 2011, Congress has debated ways to remain below the nation’s $14.292 trillion borrowing limit. The debate commenced with the passage of the 2011 U.S. Federal Budget which featured a $1.645 trillion deficit.
This multi-trillion dollar deficit ensured that the debt ceiling would be touched at some point during the current fiscal year.
That date was May 16. It took an intervention from the Treasury … (6 comments)

mortgage economy: The Mortgage Rate Rollercoaster Ride Continues! - 08/01/11 04:11 PM
Mortgage markets improved last week as the U.S. debt ceiling debate continued on Capitol Hill. Bonds traded in a range Monday through Thursday before breaking higher Friday morning.
30-year fixed conforming mortgage rates improved in California last week, falling to levels just north the product’s all-time low set in November 2010.
5-year ARMs improved last week, too. The benchmark adjustable-rate mortgage’s average national rate is now tied with its all-time low, also set last November.
This week, the direction of mortgage rates depends on two events:
The resolution of the U.S. debt ceiling debate, due Tuesday The July Non-Farm Payrolls report, due Friday … (0 comments)

mortgage economy: Pending Home Sales Up For 3rd Straight Month! - 07/29/11 05:21 PM
 
Buyers are writing contracts at a furious pace nationwide.
On a seasonally-adjusted basis, the Pending Home Sales Index rose 2 percent last month to reach its highest level since March.
A “pending home sale” is a home under contract to sell, but not yet closed. 
The forward-looking Pending Home Sales Index is up 11 percent from its low of the year, according to the National Association of REALTORS®, and well ahead of its rolling 6-month average.
Unfortunately, national data isn’t always helpful for buyers and sellers in Newport Coast and nationwide. To help make data more relevant, therefore, the official Pending … (2 comments)

mortgage economy: 16 of 20 Case-Shiller Cities Show Improvement In May! - 07/28/11 05:02 PM

Standard & Poors released its May 2011 Case-Shiller Index this week. The index measures change in home prices from month-to-month, and year-to-year, in select U.S. cities.
May’s Case-Shiller Index showed a 1 percent increase from April 2011. Home values rose in 16 of the Case-Shiller Index’s 20 tracked markets. Only Detroit, Las Vegas and Tampa fell. Phoenix was flat.
Don’t look too far into the findings, though. Like the FHFA’s Home Price Index, the Case-Shiller Index is rife with flaws.
The first flaw of the Case-Shiller Index is its limited geography. Despite being positioned as a national housing index, Case-Schiller … (1 comments)

mortgage economy: New Home Supplies Keep Shrinking; Prices Pressured Higher! - 07/27/11 10:22 PM
Home builders are slowly reducing inventory.
According to Census Bureau data, the number of new homes slid 1 percent from May. On a seasonally-adjusted, annualized basis, home buyers bought 312,000 newly-built homes last month.
It’s the third straight month of falling sales and the headline data casts the Irvine housing market in a negative light.
Upon closer inspection, however, the numbers appear quite strong. 
First, sales are down marginally. Total units sold have dropped just 2 percent from the highs of the year. And, second, the number of newly-built homes for sale is down markedly from last year
There are 22% … (2 comments)

mortgage economy: Is An FHA Mortgage Better Than A Conforming One? - 07/27/11 10:20 PM

The FHA is insuring a greater percentage of loans than during any time in recent history. In 2006, it insured roughly 5 percent of the purchase mortgage market. Today, it insures one-quarter. ”Going FHA” is more common than ever before — but is it better?
The answer — like most things in mortgage — depends on your circumstance.
Like its conforming counterpart, an FHA-insured mortgage is available as a fixed-rate loan and as an adjustable-rate one. Payments are made monthly and come without prepayment penalties.
That’s where the similarities end, however, and decision-making begins. For homeowners and buyers across Irvine , FHA … (0 comments)

mortgage economy: What’s Ahead For Mortgage Rates This Week : July 25, 2011! - 07/25/11 07:55 PM
Mortgage markets worsened last week as the Greek sovereign debt situation came closer to final resolution, and as the U.S. housing market showed signs of life.
After many weeks, European leaders agreed on a financial package for Greece that featured favorable loan terms designed to slow Eurozone contagion, along with a built-in, 37 billion euro “haircut” for private-sector investors.
The accord pleased Wall Street. Equities rallied after the announcement. Mortgage bonds sank.
Bonds also sank after a strong home builder confidence report Monday. 
Last week, conforming and FHA fixed mortgage rates increased in California and for the first time in 3 weeks. Adjustable-rate … (1 comments)

mortgage economy: Home Prices Rise For The 2nd Straight Month! - 07/22/11 06:17 PM
A strong spring season helped home values recover, says the government.
According to the Federal Home Finance Agency’s Home Price Index, home prices rose a seasonally-adjusted 0.4 percent from April to May.
It’s the HPI’s second straight increase, and puts the monthly index at its highest point since January 2011.
As a home seller in Laguna Beach , you may appreciate news such as “rising home prices”, but it’s important to remember that the Home Price Index has a several built-in flaws — the biggest of which its age.
Today, the calendar nearly reads August, yet, we’re still discussing May’s housing … (6 comments)

mortgage economy: Housing Starts Surge 9 Percent! Get Ready for a Strong Fall Season... - 07/20/11 05:09 PM
 

Builders are busy once again.
According to the Census Bureau, Single-Family Housing Starts rose to 453,000 on a seasonally-adjusted, annualized basis in June – a 9 percent spike from the month prior and the highest reading in 3 seasons.
A “Housing Start” is defined as a home breaking ground on new construction.
June’s reading is largest one-month jump since June 2009. The reading surprised Wall Street despite that the Homebuilder Confidence survey may have foreshadowed the results.
Monday, the National Association of Homebuilders reported that builders are more confident about the future of the new home sales market, and forecast a … (2 comments)

mortgage economy: Led By Expectations Of A Strong Fall Season, Homebuilder Confidence Bounces Back!! - 07/19/11 07:07 PM
Homebuilder confidence is bouncing back.
One month after an unceremonious dip highlighted by poor sales figures and dim prospects for the future, the National Association of Homebuilder’s Housing Market Index rebounded two points to 15 in July.
The monthly Housing Market Index is scored on a 1-100 scale. Readings above 50 indicate favorable conditions for homebuilders and the “new home” market. Readings below 50 indicate unfavorable conditions.
The Housing Market Index has not read higher than 50 in more than 5 years.
As a housing metric, the HMI is actually a composite of three separate surveys, self-reported by builders. The surveys … (0 comments)

mortgage economy: Retail Sales Rise For 12th Straight Month In June! - 07/15/11 06:59 PM
The American Consumer will not be deterred.
Despite worsening jobless figures and an increase in the Cost of Living, Retail Sales are climbing. In June, for the 12th straight month, retail receipts rose, excluding cars and auto parts.
Analysts expected no change from May. Instead, receipts topped $321 billion — an all-time record.
For home buyers and would-be refinancers in Irvine , this is a bit of unwelcome news. Mortgage rates are rising in the wake of the Retail Sales data release.
This is because Retail Sales account for roughly half of consumer spending, and nearly one-third of the economy overall. A rise in … (1 comments)

mortgage economy: For The 9th Straight Month, Foreclosure Filings Fall! - 07/14/11 05:27 PM

For the 9th straight month last month, foreclosure activity slowed.
According to foreclosure-tracking firm RealtyTrac, the number of foreclosure filings dropped 29 percent nationwide on an annual basis in June. The phrase “foreclosure filing” is a catch-all term, comprising default notices, scheduled auctions, and bank repossessions.
June marked the ninth consecutive month of sub-300,000 filings after 20 months above it – a promising signal for the housing market in California and nationwide.
It’s also noteworthy that each of the 10 most foreclosure-heavy states showed fewer foreclosures in June 2011 as compared to June 2010, led by Florida’s 54% decline. Florida is one of … (3 comments)

mortgage economy: What Is Annual Percentage Rate (APR)? - 07/12/11 03:54 PM

More commonly called APR, Annual Percentage Rate is a government-mandated mortgage comparison tool. It measures the total cost of borrowing over the life of a loan into dollars-and-cents.
A loan’s APR is printed in the top-left corner of the Federal Truth-In-Lending Disclosure, as shown above. When quoting an interest rate, loan officers are required by law to disclose a loan’s APR, too.
APR is meant to simplify the process of choosing between two or more loans. The theory is that the loan with the lowest APR is the “best deal” for the applicant because the loan’s long-term costs are lowest. However, … (3 comments)

mortgage economy: Mortgage Rates are back down! - 07/11/11 04:01 PM
Mortgage markets improved in roller coaster-like trading last week. And, not surprisingly, the week’s two big stories were the same two stories roiling mortgage markets since March — Greece and Jobs.In both instances, rate shoppers won. Conforming mortgage rates in California improved for the first time in 3 weeks last week.
Early in the week, mortgage rates fell as doubts resurfaced on the just-completed Greece aid package. Although an agreement had been reached by the Greek Parliament, investors are wondering if it’s a bona fide solution, or delaying an inevitable default.
Talk like this triggers a flight-to-quality, and last week, it led mortgage … (4 comments)