RealtyTrac: Home Prices Up For 16th Consecutive MonthU.S. housing markets continue to drive the economic recovery according to data released by RealtyTrac Inc.

National home prices rose by 11.90 percent year-over-year for June.

48 states reported rising home prices with only Delaware and Mississippi reporting lower home prices. Nevada led the states with a 26.50 percent gain over June 2012.

Cities also fared well on housing prices; 99 of the 100 largest U.S. cities reported gains in home prices.

Rising Home Prices And Mortgage Rates, Short Supply Of Homes

According to Mark Fleming, chief economist for CoreLogic, home price trends are rising at their fastest pace since 1977. While good news for sellers, homebuyers may find fewer affordable options over time while also contending with rising mortgage rates.

In spite of rapidly rising home prices, national home prices remain about 19 percent below their peak in April 2006.

Why The Shortage Of Available Homes?

Some homeowners are hoping to recoup losses on their homes before listing them for sale. This could be a risky decision, as many economists have previously characterized the last peak of the housing market to be a “bubble,” or an abnormal spike in home values. 

In some markets cash buyers are snapping up homes and making it difficult for mortgage-dependent homebuyers to compete.

Another common scenario that presents challenges to home buyers in areas where homes are in high demand occurs when there are multiple purchase offers for one home.

Buyers who rely on mortgage loans for financing their home purchase can improve their chances by being pre-approved for a mortgage before shopping for a home.

Fewer Foreclosed Homes Contribute To Rising Home Prices

RealtyTrac estimates that 500,000 home mortgages will be foreclosed this year. This is approximately 25 percent lower than the number of 2012 residential foreclosures.

Bank-owned homes are typically offered at lower prices and with incentives such as direct financing, but most are sold as-is with no warranties or guarantees as to their condition.  Multiple foreclosed homes within a community can drag down home prices, so fewer foreclosed homes is positive for homeowners and communities alike.

Want To Buy A Home? Don’t Give Up

Rising mortgage rates and home prices can present challenges, but working with your trusted mortgage professional can help with finding an affordable home. Programs are available for assisting eligible first-time buyers with their down payment and closing costs.

Adjustable-rate mortgage loans that provide a low fixed rate for a specified introductory period provide an alternative to higher payments required of a fixed-rate mortgage. An adjustable-rate mortgage may be a good option for first-time buyers who plan to “move up” within a few years. 

For assistance in finding an affordable home please feel free to reach out to your trusted mortgage professional today.

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Whats Ahead For Mortgage Rates This Week August 5 2013Mortgage rates were basically flat ahe end of last week.  The last three days of the week provided only a glimpse of market volatility.

The FOMC statement indicated that the Federal Reserve has not set a date for rolling back its quantitative easing program and ADP reported more private sector jobs added than expected.

While weekly jobless claims were fewer than expected, the national unemployment rate remained elevated:

Consumer confidence dropped in July to a reading of 80.3 as compared to a revised reading of 82.1 in June. Higher mortgage rates and stubbornly high unemployment rates likely contributed to a cooling of consumer enthusiasm.

What’s Coming Up This Week

The economic calendar is quiet this week, but will the markets still be volatile, especially with three Treasury bond auctions taking place:

econ08052013

The future is uncertain, continued volatility is likely;  now is a great time to take advantage of mortgage rates at these low levels.

 

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Case Shiller Home Price Index Shows Rising Prices For May 2013The S&P/Case-Shiller Home Price Index (HPI) released Tuesday presented solid evidence that the housing recovery continued during the month of May.

The Case-Shiller 20-City Index showed increasing home prices for all 20 cities.

Highest Year-Over-Year Gains Included Theses Cities:

  • San Francisco, CA 24.50 percent
  • Las Vegas, NV 23.30 percent
  • Phoenix, AZ 20.60 percent
  • Atlanta, GA 20.10 percent
  • Los Angeles, CA 19.20 percent

In surprising news, Dallas, TX and Denver, CO posted record year-over-year price gains that surpassed their pre-crisis peaks.

Year-over-year home prices in Dallas increased by 7.60 percent and Denver home prices increased by 9.70 percent year-over-year in May.

Home prices grew by 12.20 percent on a year-over year basis in May; this reading fell short of expectations of 12.40 percent, but moved slightly ahead of April’s reading of a 12.10 percent year-over year increase.

The Case-Shiller HPI is based on a three-month rolling year-over-year average of home prices in the cities surveyed.

Cities Post Month-To- Month Price Gains 

On a seasonally-adjusted month-to-month basis, home prices rose by 1.00 percent in May as compared to April. Expectations were for a 1.40 percent increase over April’s reading, which came in at 1.70 percent.

Top Gains From April To May Were Posted By These Cities:

  • San Francisco, CA 4.30 percent
  • Chicago, IL 3.70 percent
  • Atlanta, GA 3.40 percent
  • San Diego, CA 3.10 percent
  • Seattle, WA 3.10 percent

Analysts noted that home prices for two metro areas in Florida surpassed year-over-year gains in Washington, D.C.; this illustrates home values shifting geographically.

Miami home prices posted a month-to gain of 2.00 percent and a year-over-year gain of 14.20 percent.

Tampa, FL home prices posted a month-to-month gain of 1.80 percent on a year-over-year gain of 10.90 percent.

Washington, D.C. home prices gained 2.00 percent month-to-month in May, but only gained 6.50 percent year-over-year.

Rising Mortgage Rates Could Slow Price Momentum

It’s important to understand that the data in the Case-Shiller HPI lags a couple of months behind current market conditions; the latest numbers were compiled prior to mortgage rates spiking. Economists expect that the impact of higher mortgage rates won’t be seen in home prices until fall.

Higher mortgage rates are expected to slow home sales. If the demand for homes falls due to higher mortgage rates, inventories of available homes would expand, which would create competition among home sellers and potentially lead to lower home prices.

For any questions regarding your mortgage rate and buying a home feel free to contact your trusted mortgage professional today.

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Last week brought a mixed bag of economic news.  Mortgage rates rose slightly last week, trading was calm as many were on summer vacations.  It will be worth returning from vacation for this week as lots of items are on the economic calendar.

econcal0729

This week expect lots of rate volatility starting on Tuesday when consumer confidence numbers are released.  Other market moving items on the calendar include GDP, Fed adjournment, Payroll data, unemployment rate and PCE prices.

Keep thing is prospective when thinking about locking a rate.  Rates remain low and it is still a great time to purchase or refinance a home

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7/22/13 Wall Street Journal

” Over the past two months, mortgage rates have jumped by a full percentage point; this has only happened twice since 1994, an article in The Wall Street Journal said.

However, rates could rise to 6% or prices could rise an additional 20% before housing would become unaffordable relative to historical levels, the article noted.

But even though rates are low historically, they still will put a larger dent in borrowers’ budgets. A $200,000 home with a 10% down payment soared more than $100 a month, while the cost of a $450,000 home increased by $250, the article explained.  ”

Watch Video.

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What's Ahead For Mortgage Rates This Week July 22 2013Mortgage rates improved slightly last week., as economic news was a mixed bag with retail sales and housing starts coming in lower than expected, but home builder confidence in housing markets increased.

Weekly jobless claims fell, and Fed Chair Ben Bernanke testified before the Senate, saying that falling gold prices were an indication of increasing confidence in the economy, but that it was “way too soon” to say when the Fed’s quantitative easing program would be reduced.

 

What’s Coming Up

 

Date Time (ET) Statistic For Market Expects
07/22/13 10:00:00 AM Existing Home Sales Jun 5.28M
07/23/13 01:15:00 PM 2Y Treasury Note Auction ‘- ‘-
07/24/13 10:00:00 AM New Home Sales Jun 481K
07/24/13 01:15:00 PM 5Y Treasury Note Auction    
07/25/13 08:30:00 AM Initial Claims 07/20/13 328K
07/25/13 08:30:00 AM Durable Orders Jun 1.50%
07/25/13 08:30:00 AM Durable Goods -ex transportation Jun 0.40%
07/25/13 01:15:00 PM 7Y Treasury Note Auction ‘- ‘-
07/26/13 09:55:00 AM Michigan Sentiment – Final Jul 84.2

.

Affordability remains high for home buyers.  Long term it is expected to see home prices and interest rates to rise; it is a good time to buy a home.

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Home Builder Confidence Rises To Highest Level Since January 2006The National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI) rose in July.

Home builder confidence in the market for newly constructed single-family homes rose six points to a reading of 57. NAHB reports that this was the third consecutive rise in the HMI and its highest reading since January 2006.

Three components used in compiling the HMI reading include current sales, which gained five points for a reading of 60.  Confidence in prospective buyer traffic rose from 40 to 45, and sales expectations for the next six months rose from a reading of 60 to 67.

HMI: All Regions Post Gains

Regional data reflected gains in builder confidence for all U.S. geographic regions. Regional data is based on a three-month rolling average of builder confidence in each region.

The Northeast gained four points for a reading of 40; the Midwest gained eight points for a reading of 54. The South gained five points for a reading of 50, and the West gained three points for a reading of 51.

Readings of more than 50 indicate that more builders view conditions as good than poor. NAHB Economist David Crowe indicated that growing confidence is driven by factors including lower prices for building materials and more buyers vying for fewer available homes. A shortage of building space and available existing homes is improving markets for new homes.

Housing Starts Decline In June

In spite of growing home builder confidence, housing starts for June fell to their lowest level in nearly a year. Regional weather conditions contributed to the dip in housing starts, which surpassed June 2012 housing starts by 10.40 percent.

June’s housing starts fell to 836,000 on a seasonally-adjusted annual rate, and fell shy of economist’s expectation of 950,000 housing starts. Expectations were based on May’s original tally of 914,000 housing starts, which was revised upward to 928,000 on Wednesday.

Building permits for single family homes moved up by 0.60 percent to a rate of 624,000; this is the highest rate since May, 2008. A significant backlog of unused permits contributed to June’s lower number of building permits issued.

Economists are confident that the housing market continues its recovery, but may face obstacles if the government changes the mortgage interest tax deduction.

Another concern involves the pending “tapering” of the Fed’s quantitative easing program (QE). The QE program, which involves the Fed’s purchase of Treasury securities and mortgage-backed securities (MBS) was designed to support mortgage markets and also helps to keep mortgage rates low.

For specific details on local home building activity in and around Richmond , please contact your trusted mortgage professional today.

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Is It Possible That Your Gender May Influence Your Home Mortgage ApprovalIf you are applying for a joint mortgage on your property with your spouse or partner, the name that goes first could have more of an impact than you might think.

A 2010 study by the Woodstock Institute showed that mortgage lenders were inclined to show favoritism when men were the lead borrowers on joint applications. The study was undertaken within the Chicago area and it tracked joint applications for refinancing as well as home purchases. Over 250,000 applications were studied in the year 2010.

Surprisingly, the study showed that home purchase applications that listed the female partner as the primary borrower were 24 percent less likely to be approved.

When it came to mortgage refinancing, the application would be 39 percent less likely to be approved if a woman was in the primary position. The study was controlled in order to account for the size of the loan and the borrower’s income.

What Does This Mean?

The researchers at Woodstock are still carrying out more studies and analyzing their findings, but they say the results so far are quite troubling. They theorize that the discrimination might be totally unconscious and a symptom of wider discrimination against women.

Many lenders have declined to comment, but Terry Francisco, President of Bank of America, claimed that there was no policy in the mortgage underwriting process that would differentiate based on the order of the applicants names in the documents.

The findings are not complete enough at the moment to draw any conclusions. Additional data will be collected, such as age, credit scores, property values and much more in order to provide a more full and complete picture.

Increase Your Chances of Getting Approved

Regardless of the findings of this study, there are a number of ways that you can make your mortgage application more likely to be approved no matter what your gender. Here are some tips to keep in mind:

  • Don’t change jobs right before applying. Lenders want to see financial stability, so it is better if you have been with the same employer for as long as possible.
  • Repay your other debts, including your store cards, credit cards, overdrafts and more.
  • Check your credit report. If there are any errors that are making your credit score lower than it should be, you may be able to correct them.
  • Avoid making any large purchases on your credit cards while you are applying for a mortgage. When the lender looks at your credit, this could affect their calculations of your debt to income ratio.

To find out more about getting the best home mortgage approval to buy or refinance your property, please feel free to contact your trusted mortgage professional today.

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What's Ahead For Mortgage Rates This Week July 8 2013

Financial markets remain extremely volatile, a trend that is expected to continue.  Last week mortgage rates were significantly higher than those the at the close of the week prior.

The most meaningful economic reports of the week will be on the last two days of the week with Jobless Claims on Thursday and Consumer Sentiment on Friday.  Also of importance this week are the Treasury auctions with this week’s cycle being the more relevant 3, 10, and 30yr terms.  That gives Tuesday a bit more bite, at least in the afternoon (because without the 3yr auction,

Date

Time (ET)

Statistic

For

Market Expects

Prior

07/08/13

03:00:00 PM

Consumer Credit

May

$13.2B

$11.1B

07/09/13

01:15:00 PM

3-year Treasury Note Auction

07/10/13

01:15:00 PM

10-year Treasury Note Auction

07/10/13

02:00:00 PM

FOMC Minutes

06/19/13

07/11/13

08:30:00 AM

Initial Claims

07/06/13

345K

343K

07/11/13

01:15:00 PM

30-year Treasury Bond Auction

07/12/13

08:30:00 AM

PPI

Jun

0.30%

0.50%

07/12/13

08:30:00 AM

Core PPI

Jun

0.10%

0.10%

07/12/13

09:55:00 AM

Mich Sentiment

Jul

84.8

84.1

Mortgage rates remain at historically low levels but are continuing to rise.  Now is a great time to consider purchasing a home.

 

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What’s Ahead For Mortgage Rates This Week – July 1, 2013The past week was active for economic news and mortgage rates.   After a rising significantly earlier in the week mortgage interest rates ended the week almost unchanged from the close of the prior week.

Here’s the scoop on last week’s activity affecting real estate markets:

Tuesday’s Case-Shiller Composite Indices for April demonstrate the momentum of recovery in many housing markets. As of April, national home prices had increased by 12.10 percent as compared to April 2012. April’s reading also exceeded March’s reading of 10.10 percent year-over-year.

FHFA released its home prices report for April and noted that the average price for homes with mortgages owned by Fannie Mae or Freddie Mac increased by 7.40 percent, which slightly surpassed the March reading of 7.20 percent.

The Department of Commerce released New Home Sales for May and reported 476,000 new homes sold on a seasonally-adjusted annual basis. This exceeded expectations of 453,000 new home sales and also surpassed April’s reading of 454,000 new homes sold.

Wednesday brought the Gross Domestic Product (GDP) report for the first quarter of 2013. The GDP grew by 1.80 percent against expectations of 2.40 percent and the previous quarter’s growth, also 2.40 percent.

Freddie Mac’s Primary Mortgage Market Survey (PMMS) brought the days of bargain basement mortgage rates to a halt as average mortgage rates for a 30-year fixed rate mortgage moved from last week’s 3.93 percent to 4.46 percent. Average rates for a 15-year fixed rate mortgage rose from 3.04 percent 3.50 percent. This was the largest weekly jump in mortgage rates in 26 years.

Home buyers may also consider a 5/1 adjustable rate mortgage, which provides an average 5 year fixed rate of 2.74 percent.  The fixed mortgage rate converts to an adjustable rate after five years.

The National Association of REALTORS ® reported that Pending Home Sales in May rose by +6.70 percent to their highest level in 6 years.

Last week ended on a positive note with the Consumer Sentiment Index for June beating expectations of 83.0 and coming in at 84.1. May’s reading was 82.1; higher consumer confidence is likely driving demand for available homes.

Whats Ahead This Week

A holiday-shortened week is ahead, and so is the all-important Jobs Report for June.

Date Time (ET) Statistic For Market Expects Prior
07/01/13 10:00:00 AM Construction Spending May 0.50% 0.40%
07/02/13 10:00:00 AM Factory Orders May 2.00% 1.00%
07/03/13 07:30:00 AM Challenger Job Cuts Jun NA -41.20%
07/03/13 08:15:00 AM ADP Employment Change Jun 150K 135K
07/03/13 08:30:00 AM Initial Claims 06/29/13 348K 346K
07/03/13 08:30:00 AM Trade Balance May -$40.8B -$40.3B
07/03/13 10:00:00 AM ISM Services Jun 54 53.7
07/05/13 08:30:00 AM Nonfarm Payrolls Jun 165K 175K
07/05/13 08:30:00 AM Unemployment Rate Jun 7.60% 7.60%
07/05/13 08:30:00 AM Hourly Earnings Jun 0.20% 0.00%
07/05/13 08:30:00 AM Average Workweek Jun 34.5 34.5

Home mortgage rates remain at  historical low levels.  It is a perfect time to consider a home purchase or refinance.

Paul Cantor

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