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Housing Market Snapshot August, 31, 2009

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Mortgage and Lending with Hemet Mortgage

Housing Market Snapshot August, 31, 2009

The Federal Reserve has been purchasing treasuries and mortgage backed securities for most of this year which helping mortgage rates stay at artificially low levels. As we near Fall these programs are going to begin to wrap up. The Fed will stop their Treasury purchase program at the end of October and the purchase of mortgage backed securities will end at the end of the year. As both of these programs come to an end we have a good possibility to see mortgage rates begin to increase to attract more private investment. This is not an absolute but I wanted the talk about it and will continue to update you as these programs near an end.

Another program that is ending soon is the First Time Home Buyer Tax Credit. As it stands now, this program will end at the end of November. This program may possibly be extended, but this is not confirmed so I must go off of the information I have as of now. With the competitive housing market and  longer escrows we are experiencing time is wearing thin to take advantage of this great benefit. The buyer must close escrow before the end of November.

Housing Reports

The National House picture seams to be showing so signs of stabilizing. The prices have fallen drastically but are not showing so signs of stabilizing and firming. The Pending home sales and New home sales reports have both shown improvements over the last few months which is encouraging news. The inventory of homes available on the market is still very high.

Headlines to keep an eye on

Unemployment-The unemployment rate is still very high. The weekly reports are showing a drop in new people applying for unemployment benefits but the numbers are still staggering. This Friday we will get another unemployment report.

Inflation- Our current read on inflation we receive last Friday and it is showing that inflation is currently not a problem. This is something to watch in the future. Inflation is one of the main factors causing increases in mortgage rates. Currently with worker productivity high and the unemployment rate high we should see inflation stay subdued.

 

Rotten Housing trend - At the end of 2007, 6% of mortgages had at least 1-payment past due and another 2% of mortgages were in the foreclosure process.  At the end of 2008, 8% of mortgages had at least 1-payment past due and another 3% of mortgages were in the foreclosure process.  At the end of June 2009, 9% of mortgages had at least 1-payment past due and another 4% of mortgages were in the foreclosure process (source: Mortgage Bankers Association).     

 

Let me know if you have any questions,

Larry

www.HemetMortgage.com

Michael A. Caruso
Surterre Properties - Laguna Niguel, CA

Thanks for the market report Larry. Always good to be in top of things.

I hope you'll remember me if you learn of anyone moving to "The OC" and I will do the same!

 Best regards.

Michael Caruso, Broker ABR ABRM CRB CRS GREEN GRI

2007 President, Orange County Association of Realtors           

Aug 31, 2009 05:49 AM