MMC -The Mortgage Source for Realtors in Chicagoland (4/30)

Hello…

I hope you had a great weekend. I’m trying to protect myself from

catching a cold (and from the NATO security – that’s going to be nuts!)

On today’s call: Markets/This Week, Housing, Interest Rates

-          Lots of mixed economic news this year, especially last weeks’ GDP

report showing that growth cooled in the first quarter, has bolstered

the Federal Reserve’s case for keeping interest rates near zero until

at least the end of 2014. Over the last four to six weeks, there have

been numerous economic data points that have been discouraging.

As we end the first quarter, it’d be interesting to see some of the

Reports coming out this week, including Construction Spending (5/1),

Purchase Applications index (5/2) and Employment (5/4).

-          In housing, the big news currently is that the Federal Housing Finance

Agency (FHFA), has delayed its decision to allow principal reductions on

Fannie and Freddie loans. Reducing principal is all that many borrowers

are asking for. It seems more cost-effective than writing off the principal

entirely. As usual though, there is an enormous amount of macro-economic

analysis being done, most likely revolving around how much the Treasury

would gain or lose. It isn’t news to most people that more Americans are

renting than buying these days. According to CoreLogic, the share of

US household  renting reached a 15-year high, while home ownership

reached a 15-year low. I think that lack of credit and sufficient down

payment is preventing a lot of people from buying. But some of the

myths of financing a home these days have been blown out of proportion

by the media. It isn’t “easy” to obtain financing, per se. But many people

try to by a home either at a time that’s not right, or they’re looking for a

property that they think is in their price range, but really isn’t. Usually, if

a person gets pre-approved, and signs a contract within the parameters

of this approval, they should be fine. What is your take on this?

-          Interest rates looking good so far. And with more speculation that another

round of qualitative easing (QE3) is on the horizon, I’m predicting we’ll be

able to offer sub-4% rates on the 30 year fixed program. ARM’s continue

to perform well as the index prices are still extremely low.

Thanks to Roberta for the 2-unit referral…they’re all set to go! Have a great week

and let me know if you need anything.

Regards,

JP