The Home Buyer's Korner

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October 27th, 2014

What Home Buyers Need to Know for the Week of October 27th, 2014

The Buyer's Korner LogoLast week’s new on housing included provided mostly good news for existing home sales, home prices and mortgage rates, as well as the direction regulators were taking to make home ownership more affordable and eased underwriting guidelines

The National Association of REALTORS® reported that Existing Home Sales in September exceeded expectations and the prior month’s reading with a seasonally adjusted annual rate of 5.17 million sales. First-time home buyer however, remains a concern with their low participation at only 29 percent for the third straight month. Hopefully with regulators easing down payment requirement and provision in Dodd Frank being waived we’ll see more activity from this sector.

Three of four U.S. regions posted higher sales of previously owned homes with only the Midwest region reporting a decline in existing home sales. Housing Analysts point to consistent job growth and upcoming relaxed regulations imposed on mortgage lenders by FHFA through the GSA’s, since 2010 should be a vital key to improving U.S. housing markets.  FHFA Director Mel Watt said that the agency is reviewing policies that could lessen lender concerns over requests to repurchase Fannie and Freddie loans due to early defaults or other deficiencies. This was seen as a possible solution to current strict mortgage approval requirements that are limiting access to home loans by first-time and moderate income buyers. Everyone in the housing industry and would be home buyers needs to keep a close eye out for more coming from the director in the coming weeks.

Additional news from FHFA was Fannie Mae and Freddie Mac reported that home prices for mortgage secured by the GSA’s rose by 0.50 percent in August.

After falling below four percent the prior week, last week’s mortgage rates continued to decrease. The average rate for a 30-year fixed rate mortgage fell by five basis points to 3.92 percent; 15-year fixed rate mortgages had an average rate of 3.08 percent, a decrease of 10 basis points. The average rate for a 5/1 adjustable rate mortgage was one basis point below the prior week’s reading at 2.91 percent. Average discount points were unchanged at 0.50 percent.

New jobless claims have remained below 300,000 for six weeks. Thirty one states have report a decline in their unemployment rates for September and with the job recovery process in full applications for unemployment benefits in the United States dropped last week to its record-low in the last 14 years. Furthermore, applications for unemployment claims went down dramatically by 23,000 last week, the lowest number since April 2000 and lower than what analysts have even predicted. Due to week-to-week volatility, financial analysts and economists view the month-to-month readings as a more consistent data source. The Labor Department data revealed that employers have added 248,000 workers to payrolls in September.

New Home Sales in September ended the flat. September’s reading was 467,000 new homes sold on an annual basis as compared to expectations of 455,000 new homes sold and August’s reading of 466,000 new homes sold.

What’s Ahead for the Week?

This week’s scheduled economic news includes Pending Home Sale, the Case-Schiller Home Price Index Report, the Federal Open Market Committee (FOMC) Post-Meeting Statement, Consumer Sentiment and Consumer Confidence, Freddie Mac’s Weekly Mortgage Rate Survey and Weekly Jobless Claims.