The Home Buyer's Korner

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November 18th, 2013

What Home Buyers Need To Know for November 18, 2013

Guy looking up in colorVeterans Day set the pace for last week and markets remained quiet through Friday. Wednesday produced the only reading of any real importance effecting real estate economic; the federal budget deficit for October fell from September’s reading of -$120 billion to -$92 billion.  Mortgage rates increased across the board, but remain at historical low levels. As reported Thursday by Freddie Mac’s PMMS the rate for a 30-year fixed mortgage rose by 9 basis points from 4.16 percent to 4.35 percent with discount points decreasing from 0.80 percent to 0.70 percent. The average 15-year mortgage rate rose from 3.27 percent to 3.35 percent with discount points the same at 0.70 percent. The rate for a 5/1 adjustable rate mortgage increased from 2.96 percent to 3.01 percent with discount points moving from 0.50 percent to 0.40 percent.

Weekly Jobless Claims were released Thursday as well and reported 339,000 new claims; slightly higher than expected at 335,000 new claims and lower than the prior week’s reading of 341,000 new claims.

Janet Yellen, the President’s choice to replace Ben Bernanke to chair the Federal Reserve defended the Fed’s Quantitative Easing to keep long–term mortgage interest rates low during her first Senate Banking confirmation hearing. Quantitative Easing involves the Federal Reserve’s purchasing of $85 billion monthly in Treasury and Mortgage Backed Securities.

TransUnion, one of three major credit reporting agencies in the U.S., reported that mortgage defaults fell to a five-year low to a reading of 4.09 percent for the third quarter of 2013. This reading is lower year-over-year than the revised reading of 5.33 percent for the third quarter of 2012. The reading for third quarter 2013 mortgage defaults is also lower than the reading of 4.32 percent for the second quarter of 2013. A mortgage default is defined by TransUnion as a home loan that is at least two months past due on payments.  Analysts noted that mortgage defaults have declined during the past five quarters.  Furthermore, TransUnion expects mortgage defaults to fall below 4.00 percent by years end.

What’s Ahead for the Week?

The National Association of Home Builders is scheduled to release its Home Builder Confidence Index for November.

Along with the weekly releases of Jobless Claims and Freddie Mac’s PMMS report on mortgage rates, the FOMC is expected to release the minutes of its last meeting.

Existing Home Sales for October are also set for release later in the week.