What Home Buyers Need to Know

May 20th, 2013

Monday: Retail sales for April increased to -0.1 percent from the March reading of -0.5 percent.  Wall Street’s forecast was for -0.6 percent. Retail sales are important to economic recovery as sales of goods and services represent approximately 70 percent of the U.S. economy.

Tuesday: The National Federation of Independent Business (NFIB) released its Small Business Optimism Index for April.  April’s index rose by 2.6 points to 92.1. A reading of 90.7 indicates economic recovery and based on a survey of 1873 NFIB member businesses.

Wednesday: The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May matched investor expectations with a reading of 44. It’s worthy to note that the March reading was 41 and suggests that builders are slowly gaining confidence in national housing markets. 

Thursday: The U.S. Commerce Department reported that Housing Starts fell by 16.5 percent in April to a seasonally-adjusted annual level of 853,000 and from 1.02 million in March. This reading fell short of investors’ consensus of 965,000 housing starts.   A closer look indicates the decrease was created by the apartment construction sector and something property investors will want to watch closely going forward

Friday: Consumer sentiment for May surpassed investor expectations of +0.3 percent and came in at +0.6 percent. Consumer sentiment is an important indicator of future economic growth and as sentiment improves history tells us consumers buy homes.  If this sounds like you, be sure to join the konversation as our local Google + Communities to the right of our blog and find the right team of real estate professionals for you.

Mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose from 3.42 percent to 3.51 percent with borrowers paying 0.70 in discount points and all other typical buyer closing costs.  The 15-year fixed rate rose from 2.61 percent last week to 2.69 percent this week with borrowers paying 0.70 in discount points and all of their closing costs a well.  The week’s news is consistent with a strengthening economy and home buyers need to be assured we are still at historically low rates, while home affordability remains strong.

Looking ahead, this week’s economic news includes the Existing Home Sales.  April’s report is expected to show 5.00 million homes sold on a seasonally-adjusted annual basis against the March tally of 4.93 million.  Also set for release on Wednesday are the Federal Open Market Committee (FOMC) Minutes for the meeting held April 30 and May 1.  The FOMC meetings typically include discussions of the Federal Reserve’s current policy on quantitative easing (QE), which consists of the Fed buying $85 billion per month in Mortgage Back Securities. QE is a tool created by the Fed’s to keep rates lows during our economic recovery and something to watch closely as we move into the summer months. When the QE program ends, mortgage rates will likely increase. Thursday brings us the weekly Jobless Claims Report, New Home Sales for April and the Home Price Index.  It’s worth noting that the consensus for New Home Sales for April is 430,000 as compared to the March reading of 417,000.  

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What Home Buyers Need to Know

May 13th, 2013

Mortgage rates rose last week with average rates a 30-year fixed rate mortgage rising from last week’s 3.35 percent to 3.42 percent with buyers paying all closing costs and 0.7 percent in discount points.

Average rates for a 15-year fixed rate mortgage rose from 2.56 percent to 2.61 percent with buyers paying their closing costs and 0.7 percent in discount points.

Freddie Mac also reports that average rates for a 5/1 adjustable rate mortgage rose from 2.56 percent last week to 2.58 percent with buyers paying their closing costs and 0.5 percent in discount points. 

Here are noteworthy points from last week’s economic news:

Monday:  As the economy improves, a majority of participants in the Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that their lending institutions would not be relaxing guidelines and standards in the foreseeable future.

Tuesday: CoreLogic reported a 1.9 percent increase in national home prices for March and represents the 13th consecutive increase in home prices, with a year-over-year increase of 10.5 percent.  Home prices saw their strong increases in the West; Nevada posted a 22.2 percent gain from last March and California posted a 17.2 percent year-over-year gain. Furthermore, they’re predicting a year-over-year increase of 9.6 percent for home prices for April’s report, with a monthly increase of 1.3 percent increase expected between March and April.  These numbers point to the beginnings of a robust recovery in real estate.  If you haven’t visited any open homes lately, now would be a good time to visit several homes in your area while prices are still near historical low levels.

Thursday: Weekly jobless claims brought welcomed news with 323,000 claims; this was lower than predicted at 335,000 new claims.

Friday: The Treasury had a nice surprise with an unexpected surplus in revenue of + $113 billion for April, helping to offset sequestration.  It’s noteworthy to mention this data was $54 billion higher than for April 2012 and the highest monthly surplus since April, 2008.

What‘s Coming Up

This week brings a couple important economic reports affecting real estate.

Wednesday: The Home Builders Index and the Weekly Jobless Claims.

Thursday: Housing Starts numbers will be released.

Friday:  Consumer Sentiment and Leading Indicators Reports will round out the week. Consumer Sentiment is a key indicator in terms of the overall all housing market and where it’s going.  With rising Consumer Sentiment home prices trend up as more home buyers enter the market feeling secure about their economic conditions. 

If you’re interested in learning more about homeownership, visit our ”Home Buyer’s Korner” in your city located to the right of our blog and find real estate and mortgage professionals ready to assist you.

The US Housing Market

May 10th, 2013

RealtyTrac recently reported that foreclosure filings across the county were down, while foreclosure filings were up in several states. 

There are two systems for foreclosing on residential real estate in the United States; judicial and non-judicial foreclosure. Judicial foreclosure proceedings generally take longer than non-judicial processes due to this court involvement.  Twenty two states use judicial procedures as the primary way to foreclose. These include: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.

Recently many of these courts have made substantial progress with their backlog, resulting in an increase of available homes for many local markets in these judicial foreclosure states.  Due to the backlog scheduled foreclosure auctions hit a 30-month high in April rising by 22 percent between March and April.  

It’s worth noting that several states marked remarkably higher rates of foreclosure sales in April 2013 as compared to April 2012. They included Maryland (+199 percent), New Jersey (+91 percent), Ohio (+73 percent), Oklahoma (+57 percent), and Florida (+55 percent) 

April’s Foreclosure Report:

Approximately one of every 905 U.S. housing units had a foreclosure filing during April and 144,790 foreclosure filings were made nationwide.  That’s a 5 percent decrease from March and represents an annual decrease of 23 percent year-over-year.  April’s residential foreclosure activity was at its lowest since February 2007.

Opposed to April’s judicial foreclosure process was the non-judicial states, which reported a 7 percent decrease in April as compared to March and 43 percent lower in April 2013 as compared to April 2012; this was the lowest reading for non-judicial foreclosure sales scheduled since December of 2005.

With home values on the rise and large numbers of delayed foreclosures clearing the books, evidence supports that the U.S. real estate market is steadily improving.  As more foreclosures are removed from the housing inventory, home prices should continue to stabilize and increase throughout the country as we move into 2013.

If you’re interested in learning more about homeownership, visit our ”Home Buyer’s Korner” in your city located to the right of our blog and find real estate and mortgage professionals ready to assist you.

What’s Home Buyers Need To Know

The Week of May 6, 2013

Mortgage rates fell again last week reaching record low levels again. Freddie Mac announced the average rate for a 30-year fixed rate mortgage (FRM) fell from 3.40 percent to 3.35 percent and the average rates for a 15-year FRM moved from 2.61 percent to 2.56 percent.  The average rates for a 5/1 adjustable rate mortgage (ARM) fell to 2.56 from last week’s average of 2.58 percent, while discount points for last week’s mortgage rates ranged from 0.7percent for 30 and 15 year FRM loans to 0.5 percent for a 5/1 ARM.  As home prices increase home buyers should note these rates, as falling mortgage rates can offset the impact of rising home prices..

Last Week Showed Strong Signs of an Improving US Economy

Last week’s economic news pointed to further indications of economic recovery, with housing contributing to overall confidence in a stronger economy.  Pending home sales moved up to 1.50 percent in March from February’s -1.07 percent. The reading beat Wall Street’s forecast of 0.90 percent for March.  The Case-Shiller Home Price Index for February reported that the national average home price had increased by 9.3 percent year-over-year between February 2012 and February 2013. By comparison, the average national home price between January 2012 and January 2013 increased by 8.1 percent year-over-year.

The Federal Open Market Committee (FOMC) in its scheduled statement noted signs of an improving economy and pointed to the housing markets as a leading contributor to the recovery. The FOMC statement, however mentioned that economic conditions had not improved enough to change or cease the Federal Reserve’s quantitative easing ~ QE3 that is the driving force to keep long-term mortgage rates low.

The weekly Jobless Claims Report brought better-than-expected news with new jobless claims coming in at 324,000, less than the expected reading of 345,000 new jobless claims and also higher than the previous report’s reading of 342,000 new jobless claims.  The Bureau of Labor Statistics issued its monthly “Jobs Report,” which consists of the Non-farm Payrolls Report and the national Unemployment Rate. New jobs added exceeded expectations for April with 165,000 jobs, estimate where for 135,000 new jobs.  April’s reading also surpassed the March reading of 138,000 new jobs.

The unemployment rate dropped to 7.5 percent as compared to last month’s reading of 7.6 percent. To put this reading in perspective, the FOMC has targeted an unemployment rate of 6.5 percent as a benchmark before addressing its current policy on QE3.

What’s Ahead for Mortgage Rates this Week

Only two reports will be issued this week that could impact mortgage interest rates, the Jobless Claims report on Thursday and the Federal Budget.  Remember 324,000 claims were submitted last week for jobless claims and less than expected, hopefully this trend will continue.  Friday, the Federal Budget will be released; this could influence financial markets depending on what programs and services are cut or reduced. 

If you’re interested in learning more about homeownership, visit our ”Home Buyer’s Korner” in your city located to the right of our blog and find real estate and mortgage professionals ready to assist you.

Mortgage Rates Fell Again Last Week

The Week of April 29, 2013

Mortgage rates fell again last week and once again near their record lows.  According to Freddie Mac, the average rate for a 15-year fixed rate mortgage was at a record low of 2.61 percent as compared to 3.1 percent just one year ago.  The average rate for a 30-year fixed rate mortgage fell to 3.40 percent and near its record low of 3.31 percent.

Home Values On The Rise

Last week’s economic news was mixed; The Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, released its Home Price Index for February.  According to the index, home prices increased by 0.7 percent between January and February, and increased by 7.1 percent year-over-year on a seasonally adjusted annual basis.

The National Association of REALTORS®, existing home sales for March fell short of the expected 5.03 million and came in at 4.92 million existing homes sold on a seasonally adjusted annual basis.  The reading was 0.7 percent shy of February’s reading of 4.95 million existing homes sold and most likely impacted more by homeowners may be taking a wait-and-see attitude before they decide on listing their home as home values continue to rise.

Jobs Numbers Are Getting Better

Weekly jobless claims fell to 339,000 and were short of the consensus of 351,000 and the prior week’s 355,000 jobless claims filed.  The economy in general also benefits as households gain income purchasing power increases.  Consumer Sentiment rose by 2.1 points to 76.4 over the March reading of 72.3 percent.  April’s reading also surpassed expectations of 74.0 percent.  As consumers gain confidence in the economy, they are generally more likely to buy homes and make other major purchases that contribute to the U.S. economy.

Coming Up this Week

This week’s economic news calendar includes several reports that home buyers need to watch as they impact the housing sector and mortgage interest rates:

• Monday: Personal Income, Consumer Spending and Pending Home Sales reports are due.
• Tuesday: The Case Shiller/Wells Fargo Home Price Index for February and Consumer Confidence for April will provide data concerning national and regional home prices.
• Wednesday: The customary statement by the Federal Open Market Committee (FOMC) is set for release at the conclusion of its meeting. The ADP Employment Index for April and Construction Spending for March provide data on jobs and trends in construction spending.
• Thursday: Weekly Jobless Claims report
• Friday: The Non-farm Payrolls Report and Unemployment Rate for April, otherwise know as the Jobs Report, will be released.

While no one can predict for certainty what will happen with mortgage rates, industry analysts indicated that they expect rates to remain low in the near-term. 

If you’re interested in learning more about homeownership, visit our local “Real Estate Broker” & “Mortgage Lender” Google+ Communities located to the right of our blog.

Mortgage Rates Fell for the Third Week

The Week of April 22, 2013

Freddie Mac announced this week that the average rate for a 30-year fixed rate mortgage fell by two basis points to 3.41 percent and down from 3.90 percent year-over-year.

The average rate for a 15-year fixed rate mortgage was 2.64 percent as compared to last week’s 2.65 percent and down from 3.13 percent year-over-year.

Falling mortgage rates are attributed to reduced consumer spending.  Last week’s economic news included the NAHB Wells Fargo Housing Market Index (HMI), with a reading of 42 for March, four point below investor expectations and two points below February’s index reading.

50 is the equilibrium to understand HMI.  A reading of 50 or above indicates that more builders than not surveyed have a positive outlook.  March results were impacted by builder concerns over tight builder credit, a lack of available lots and increasing construction costs.

March Housing Starts Increased ~ More Good News for Housing

The U.S. Department of Commerce issued its monthly Housing Starts report last Tuesday.  Housing starts for March came in higher than anticipated at a seasonally adjusted annual rate of 1.04 million.  The consensus had been 933,000 and last week figures beat February’s reported 968,000 housing starts.  Additionally Housing starts rose by 7 percent over February, and rose 47 percent over March 2012, the highest year-to-year increase since 1992.

The Federal Reserve issued its Beige Book Report, which is compiled from reports by the 12 districts of the Federal Reserve. 5 districts reported moderate economic growth, 5 districts reported modest growth, and 2 reported slight economic growth.

Based on the data contained in the Beige Book Report, economists are not expecting the Fed to make changes to its current quantitative easing (QE) program of purchasing $85 billion monthly in bonds and MBS; helping mortgage rates remain at historical lows.

What‘s Up this Week?

The National Association of REALTORS® releases its Existing Home Sales report for March today.  The consensus is for 5.03 million homes sold on a seasonally adjusted annual basis.  Existing Home Sale for February was 4.98 million existing homes sold. 

More housing news comes on Tuesday from the FHFA with its Home Price Index for February and the U.S. Department of Commerce releases its New Home Sales for March as well.  The general consensus is 421,000 new homes sold against February’s reading of 411,000 new homes sold.

Thursday’s Weekly Jobless claims are expected to come in at 351,000 as compared to last week’s 352,000.  Employment is a key factor in terms of consumers buying homes and qualifying for mortgage loans. 

If you’re interested in learning more about homeownership, visit our local “Real Estate Broker” & “Mortgage Lender” Google+ Communities located to the right of our blog.