Mortgage Newsletter- March 4th, 2013 Dana Bain Premiere Mortgage 978-422-2311

Mortgage and Lending with Premiere Mortgage Services Inc. MLO 18693


Newsletter-March 4th, 2013
Provided by
Dana Bain & Robin Dunbar Bain

Dana Bain
Premiere Mortgage Services

11 Malvern Hill Road
Sterling, MA 01564
Phone: (978) 422-2311
Fax: (978) 422-2313

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Market Comment

Mortgage bond prices finished the week higher, which pushed rates lower.MBS prices surged higher Monday afternoon in response to continued economic uncertainty in the euro zone.The rate improvements extended Tuesday morning after some weaker than expected data.Durable goods order fell 5.2%, considerably lower than the expected 3.5% decrease.Fed Chairman Bernanke gave his semiannual testimony to the House and Senate.This was a rare time that his remarks did not result in significant market swings and gives some credence to the thought that the U.S. economy may be stabilizing despite continued uncertainty.The great news was that most rates finished the week about 1/2 of a discount point lower.



Date & Time



ADP Employment

Wednesday, March 6,
8:30 am, et

169k Important.An indication of employment.Weakness may bring lower rates.
Factory Orders

Wednesday, March 6,
10:00 am, et

Up 0.1% Important.A measure of manufacturing sector strength.Weakness may lead to lower rates.
Fed “Beige Book”

Wednesday, March 6,
2:00 pm, et

None Important.This Fed report details current economic conditions across the US.Signs of weakness may lead to lower rates.
Weekly Jobless Claims

Thursday, March 7,
8:30 am, et

345k Important.An indication of employment.Higher claims may result in lower rates.
Preliminary Q4 Productivity

Thursday, March 7,
8:30 am, et

Up 0.1% Important.A measure of output per hour.Improvement may lead to lower mortgage rates.
Trade Data

Thursday, March 7,
8:30 am, et

$38.5B deficit Important.Affects the value of the dollar.A falling deficit may strengthen the dollar and lead to lower rates.

Friday, March 8,
8:30 am, et

Payrolls +149k

Very important.An increase in unemployment or weakness in payrolls may bring lower rates.

Housing Affordability

Each month the National Association of Realtors (NAR) releases their Housing Affordability Index.The index measures the affordability of a home based on what a typical family earns.It assumes the borrower has a 20% down payment (80% loan to value) and a “front ratio” or housing ratio not to exceed 25% of gross income.It is based on a typical home at the national and regional levels based on the most recent monthly price and income data.

An index of 100 is defined as the point where a median-income household has enough income to qualify for the purchase of a median-priced existing single-family home.Housing prices and mortgage rates influence the index.Generational low mortgage rates coupled with lower home prices following the housing collapse have left the index at an all time high.

According to NAR, “For all of 2012, NAR projects the housing affordability index to be a record high 194, up from 186 in 2011, which was the previous record.”That means that the typical family earns 194% of the income necessary to purchase the typical house.Put another way, the same family can afford almost twice as much house.

Rising housing prices coupled with rising interest rates could dent affordability.NAR projects the housing affordability index will average 160 during 2013.Recent data on housing indicates the market is recovering.Buyers who take advantage of the current situation of low rates and affordable housing are set to secure their financial futures.The future is always uncertain but there is no uncertainty in these historically low rates.Now is a great time to take advantage of them.




  Mortgage Newsletter- March 4th, 2013  Dana Bain Premiere Mortgage 978-422-2311

Newsletter-March 4th, 2013

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