Good morning…
I hope you were out enjoying this great weather. It felt like California! Sometimes
I wish I still lived there but, I digress…
On today’s call: Markets, Housing and upcoming data, First-time buyers, Rates
- The markets are relatively quiet to kick off the week, keeping rates steady
after an extremely volatile pace set in the middle of last week. Rates had
initially gone up almost a full .25% but thankfully came back down as investor
uncertainty about the Euro crisis as well as declining consumer confidence
figures has them continuing to believe in the bond market.
- Many major indexes will be out this week, including existing home sales,
home starts, and pending home sales, so keep an eye on those…I think we’ll
see some positive statistics, especially in Chicago. This months’ homebuilder
confidence report, released today, didn’t change from last month, but it’s
still at the highest mark since June of 2007, with builders from the Midwest
registering the highest confidence. I’m predicting that the new homes sales
index, coming out this Friday, will be good, and should rise in the coming months.
- I deal with many first-time homebuyers and it can be an overwhelming journey
for these people as they look to search for, finance, and close on a new home.
One thing that has been interrupting their quest is the prevalence of student
loans. This debt has now topped the one trillion dollar mark nationwide. And
the default rate is now close to 25% for those who attend for-profit schools.
While this is alarming, it is also going to prove prohibitive to those who aren’t
in default as lenders have tightened the guidelines on this subject. It is very
important to know that for conforming loans (Fannie/Freddie), the payment
of the student loans must be included in their liability calculation, regardless
of the length of time the payment is actually deferred. FHA will allow a
deferred payment, as long as it’s a year or more after the closing date. Keep
this in mind when you have young buyers as it could be a seemingly minor
thing that could turn into a major problem.
- As I mentioned, rates are holding steady today. The 30 year fixed can still be
had for under 4%, but 4% is more likely at this point. Margins on ARM’s are
starting to increase, and the range for these is 2.75%-3.5%. For Jumbo rates,
just let me know and I can get you a quote.
Thanks to Marcy for the referral for the 3-flat in Rogers Park…looking good! Have
a great week and please let me know if you need anything.
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