"TOMORROW IS OFTEN THE BUSIEST DAY OF THE WEEK." Spanish Proverb. And it sure seemed that way every day of last week, with one of the busiest economic calendars seen in years. Friday’s Jobs Report capped off a week filled with election results and a big announcement from the Fed regarding the next round of Quantitative Easing (QE2). So what impact did all of this news have on Bonds and home loan rates? Let’s break it down.
On Friday, the Labor Department reported that 151,000 jobs were created in October, all in the private sector. This was much higher than the 60,000 job creations that were expected - and while the economy needs a lot more job creations to put a dent in the unemployment rate, this is a great start to a recovery in the labor market.
Adding to the positive tone of the report, there were upward revisions to both August and September's numbers, and the Unemployment Rate held steady at 9.6%. The Average Hourly Wage increased as well - and across the board, the numbers were stronger than anticipated. Should this trend continue in the coming months, it would support the notion that labor has not only stabilized - but is perhaps even expanding, which would be welcome news indeed.
And while this is great news for the economy, remember that when good economic news arrives, investors move money into Stocks... and this pulls money out of all types of Bonds, including Mortgage Backed Securities, which home loan rates are based on. When money moves out of Bonds, it causes Bond pricing and home loan rates to worsen - and that’s exactly what happened, following the better than expected Jobs Report. Although we all like to hear good news for the economy - any strong, positive economic news is bad news for Bond pricing and home loan rates.
Home loan rates were exceptionally volatile all last week - and likely to remain so ahead. While rates are still at very low, affordable levels - they won’t last forever, so please get in touch if you have questions about how the current rate climate might benefit your situation.
In other big news last week, the Federal Reserve Board made their much anticipated announcement regarding another round of "Quantitative Easing" or QE2, where the Fed will participate in purchasing Treasury Securities in a bid to keep the economic recovery on track. On Wednesday, the Fed announced that they intend to purchase $600 Billion in Treasuries, starting now and continuing through mid-2011, which equates to about $75 Billion in purchases per month. So how will this impact home loan rates ahead?
We need to be mindful that the Fed initiated QE2 for three reasons. One, to help lower interest rates in order to spur consumer and business spending... which in turn will create inflation. Two, to help lower the unemployment rate via an economic boost. And three, to help push Stock prices higher. And all three of these factors will cause headwinds for Bonds and home loan rates down the road.
As the Fed gets to work on putting their latest plan into effect - we can be sure that inflation readings in various economic reports will likely be more highly scrutinized by the markets. Upcoming reports will reveal whether the Fed will be successful in their quest to fight deflation, and create a level of Goldilocks inflation that is not too hot, not too cool... but juuuust right. Ultimately, if inflation expectations creep higher, interest rates for long-term Bonds - like Mortgage Bonds - will rise as well.
One thing is certain, the volatility we saw in the markets last week is sure to continue. If you have any questions about how you can take advantage of today’s historic low rates and fabulous home prices, please contact me, and let’s evaluate your current situation. And feel free to forward this email to any friends, family members, or colleagues who may have questions as well - I’m always pleased to talk with anyone you’d refer my way.
All "Betts" on Brian! The Only Relator you want!
Showing posts with label Lending Laws. Show all posts
Showing posts with label Lending Laws. Show all posts
Wednesday, November 10, 2010
Tuesday, November 2, 2010
Last Week in the News November 1, 2010
Last Week in the News November 1, 2010
Existing home sales rose 10% in September to a seasonally adjusted annual rate of 4.53 million units from a revised 4.12 million units in August. The inventory of unsold homes on the market declined 1.9% to 4.04 million, a 10.7-month supply at the current sales pace, down from a 12-month supply in August.
The Standard & Poor's/Case-Shiller 20-city housing price index — on a seasonally adjusted basis — fell 0.3% in August after a 0.2% decrease in July. On a year-over-year basis, prices rose 1.7% compared with August 2009.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 22 rose 3.2%. Refinancing applications increased 3%. Purchase volume rose 3.9%.
Orders for durable goods — items expected to last three or more years — rose 3.3% in September after decreasing a revised 1% in August. Excluding volatile transportation-related goods, orders posted a monthly decrease of 0.8%.
New home sales rose 6.6% in September to a seasonally adjusted annual rate of 307,000 units from a rate of 288,000 units in August. Economists had expected a pace of 300,000 units.
The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2% in the third quarter of 2010.
Initial claims for unemployment benefits fell by 21,000 to 434,000 for the week ending October 23. Continuing claims for the week ending October 16 fell by 122,000 to 4.35 million, the lowest level since the recovery began.
Upcoming on the economic calendar are reports on construction spending on November 1, factory orders on November 3 and pending home sales on November 5.
All "Betts" on Brian! The Only Realtor you want!
Existing home sales rose 10% in September to a seasonally adjusted annual rate of 4.53 million units from a revised 4.12 million units in August. The inventory of unsold homes on the market declined 1.9% to 4.04 million, a 10.7-month supply at the current sales pace, down from a 12-month supply in August.
The Standard & Poor's/Case-Shiller 20-city housing price index — on a seasonally adjusted basis — fell 0.3% in August after a 0.2% decrease in July. On a year-over-year basis, prices rose 1.7% compared with August 2009.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 22 rose 3.2%. Refinancing applications increased 3%. Purchase volume rose 3.9%.
Orders for durable goods — items expected to last three or more years — rose 3.3% in September after decreasing a revised 1% in August. Excluding volatile transportation-related goods, orders posted a monthly decrease of 0.8%.
New home sales rose 6.6% in September to a seasonally adjusted annual rate of 307,000 units from a rate of 288,000 units in August. Economists had expected a pace of 300,000 units.
The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2% in the third quarter of 2010.
Initial claims for unemployment benefits fell by 21,000 to 434,000 for the week ending October 23. Continuing claims for the week ending October 16 fell by 122,000 to 4.35 million, the lowest level since the recovery began.
Upcoming on the economic calendar are reports on construction spending on November 1, factory orders on November 3 and pending home sales on November 5.
All "Betts" on Brian! The Only Realtor you want!
How Much Equity Do I Have?
How Much Equity Do Local Homeowners Have?
Homeowner equity for median homes in 154 metro areas varies considerably depending on location, according to a recent NAR report. An analysis of these median homes in 154 metro areas over a five-year period (2004 – 2009) reveals:
87 metro areas experienced price appreciation.
In 13 metro areas, a median buyer with a 30-year fixed-rate mortgage accumulated an average of more than $50,000 in equity.
67 metro areas experienced price depreciation.
In 11 metro areas — all located in California, Nevada and Florida — a median buyer with a 30-year fixed-rate mortgage was underwater more than $50,000.
Over the last 10 years, the price and equity picture is much brighter. Median buyers in the top 29 metro areas could have accumulated at least $100,000 or more in equity. Interestingly, four of the six California cities that have had the biggest equity losses over the last five years are among the biggest gainers over a 10-year horizon. Only 12 of 154 metro areas experienced price depreciation over this 10-year period, and only seven areas — concentrated in Ohio and Michigan — saw a decline substantial enough to leave a median buyer underwater.
Over an even longer term, we see positive equity build-up in all areas. For example, in 75 of the 154 areas, a buyer who bought at the median price 20 years ago would have over $100,000 in equity in their home. In an additional 67 areas, the buyer would have more than $50,000 in equity. Take a look at overall performance in your metro area by visiting NAR's Metro-Area Housing Equity Reports page.
All "Betts" on Brian! The Only Realtor you want!
Homeowner equity for median homes in 154 metro areas varies considerably depending on location, according to a recent NAR report. An analysis of these median homes in 154 metro areas over a five-year period (2004 – 2009) reveals:
87 metro areas experienced price appreciation.
In 13 metro areas, a median buyer with a 30-year fixed-rate mortgage accumulated an average of more than $50,000 in equity.
67 metro areas experienced price depreciation.
In 11 metro areas — all located in California, Nevada and Florida — a median buyer with a 30-year fixed-rate mortgage was underwater more than $50,000.
Over the last 10 years, the price and equity picture is much brighter. Median buyers in the top 29 metro areas could have accumulated at least $100,000 or more in equity. Interestingly, four of the six California cities that have had the biggest equity losses over the last five years are among the biggest gainers over a 10-year horizon. Only 12 of 154 metro areas experienced price depreciation over this 10-year period, and only seven areas — concentrated in Ohio and Michigan — saw a decline substantial enough to leave a median buyer underwater.
Over an even longer term, we see positive equity build-up in all areas. For example, in 75 of the 154 areas, a buyer who bought at the median price 20 years ago would have over $100,000 in equity in their home. In an additional 67 areas, the buyer would have more than $50,000 in equity. Take a look at overall performance in your metro area by visiting NAR's Metro-Area Housing Equity Reports page.
All "Betts" on Brian! The Only Realtor you want!
Last Week in the News October 18, 2010
Last Week in the News October 18, 2010
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 8 rose 14.6%. Refinancing applications jumped 21%. Purchase volume fell 8.5%.
The trade deficit increased 8.8% to $46.3 billion in August. Economists had expected the trade deficit to rise to $44.3 billion. Exports rose 0.2% to $153.9 billion. Imports increased 2.1% to $200.2 billion.
The producer price index, which tracks wholesale price inflation, rose 0.4% in September, matching a 0.4% increase in August. Core prices — excluding food and fuel — rose 0.1%, also matching a 0.1% increase in August. For the year, seasonally adjusted wholesale prices are up 4%.
Retail sales rose 0.6% in September after an upwardly revised 0.7% increase in August. Economists had anticipated retail sales to rise 0.5% in September.
Total business inventories rose 0.6% in August, following a revised 1.1% increase in July. Total business sales rose 0.1% in August after a 0.8% increase in July.
Consumer prices rose a seasonally adjusted 0.1% in September, following a 0.3% increase in August. For the year, seasonally adjusted consumer prices are up 1.1%.
The Reuters/University of Michigan consumer sentiment index for October's preliminary reading fell to 67.9 from 68.2 in September.
Initial claims for unemployment benefits rose by 13,000 to 462,000 for the week ending October 9. Continuing claims for the week ending October 2 fell by 112,000 to 4.39 million, the lowest level since November 2008.
Upcoming on the economic calendar are reports on the housing market index on October 18, housing starts on October 19 and the index of leading economic indicators on October 21.
All "Betts" on Brian! The Only Realtor you want!
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 8 rose 14.6%. Refinancing applications jumped 21%. Purchase volume fell 8.5%.
The trade deficit increased 8.8% to $46.3 billion in August. Economists had expected the trade deficit to rise to $44.3 billion. Exports rose 0.2% to $153.9 billion. Imports increased 2.1% to $200.2 billion.
The producer price index, which tracks wholesale price inflation, rose 0.4% in September, matching a 0.4% increase in August. Core prices — excluding food and fuel — rose 0.1%, also matching a 0.1% increase in August. For the year, seasonally adjusted wholesale prices are up 4%.
Retail sales rose 0.6% in September after an upwardly revised 0.7% increase in August. Economists had anticipated retail sales to rise 0.5% in September.
Total business inventories rose 0.6% in August, following a revised 1.1% increase in July. Total business sales rose 0.1% in August after a 0.8% increase in July.
Consumer prices rose a seasonally adjusted 0.1% in September, following a 0.3% increase in August. For the year, seasonally adjusted consumer prices are up 1.1%.
The Reuters/University of Michigan consumer sentiment index for October's preliminary reading fell to 67.9 from 68.2 in September.
Initial claims for unemployment benefits rose by 13,000 to 462,000 for the week ending October 9. Continuing claims for the week ending October 2 fell by 112,000 to 4.39 million, the lowest level since November 2008.
Upcoming on the economic calendar are reports on the housing market index on October 18, housing starts on October 19 and the index of leading economic indicators on October 21.
All "Betts" on Brian! The Only Realtor you want!
Wednesday, February 24, 2010
New RESPA laws
New RESPA laws
We wanted you to be aware of the vast changes that have once again challenged our industry beginning January 1, 2010. The new Regulation X (as it is being called) dramatically affects the way disclosures are handled on the loan side of a purchase or refinance. This has hit the whole industry nationally, whether the loan is done through a bank, broker or mortgage banker.
The new GFE (Good Faith Estimate) 2010 may have ramifications on the time a transaction can be completed and any changes that may affect the deal along the way. Any "change" to rate, fees, extensions, sales price, credits, etc... or anything that may affect the APR of the loan could impact the ability to close on time. Due to these changes, it has never been more important to fight for a reputable escrow, title and lending institution that you know and trust to handle your transactions. This is not a market for rookies!
There are many lenders pushing for changes to the purchase contract to now extend the loan contingency dates and to encourage longer escrow periods to allow for these changes. Many rush situations will now be completely out of the control of the lender to accommodate, as any change to the transaction will set into effect a new process for re-disclosure, so please establish realistic time frames when negotiating your purchase contract.
We will be sharing a lot of information on a go forward to keep you informed, but wanted to make sure you were aware of some of the implications of the changes that went into effect. This is said to be the biggest change to the mortgage lending industry in over 20 years and will have a vast impact on the ability to modify and change purchase transactions and any change that will impact the APR on the loan.
We have hit the ground running with significant training and education to keep us at the front of the pack. We will keep you informed as to how the change is impacting the lending world and to keep you up to date on what you can expect for the future.
We appreciate your support and will guarantee that we will do everything in our power to educate you and your clients and to insure a smooth lending process for your clients. We are committed to your success and know that 2010 will be solid year for Real Estate.
We wanted you to be aware of the vast changes that have once again challenged our industry beginning January 1, 2010. The new Regulation X (as it is being called) dramatically affects the way disclosures are handled on the loan side of a purchase or refinance. This has hit the whole industry nationally, whether the loan is done through a bank, broker or mortgage banker.
The new GFE (Good Faith Estimate) 2010 may have ramifications on the time a transaction can be completed and any changes that may affect the deal along the way. Any "change" to rate, fees, extensions, sales price, credits, etc... or anything that may affect the APR of the loan could impact the ability to close on time. Due to these changes, it has never been more important to fight for a reputable escrow, title and lending institution that you know and trust to handle your transactions. This is not a market for rookies!
There are many lenders pushing for changes to the purchase contract to now extend the loan contingency dates and to encourage longer escrow periods to allow for these changes. Many rush situations will now be completely out of the control of the lender to accommodate, as any change to the transaction will set into effect a new process for re-disclosure, so please establish realistic time frames when negotiating your purchase contract.
We will be sharing a lot of information on a go forward to keep you informed, but wanted to make sure you were aware of some of the implications of the changes that went into effect. This is said to be the biggest change to the mortgage lending industry in over 20 years and will have a vast impact on the ability to modify and change purchase transactions and any change that will impact the APR on the loan.
We have hit the ground running with significant training and education to keep us at the front of the pack. We will keep you informed as to how the change is impacting the lending world and to keep you up to date on what you can expect for the future.
We appreciate your support and will guarantee that we will do everything in our power to educate you and your clients and to insure a smooth lending process for your clients. We are committed to your success and know that 2010 will be solid year for Real Estate.
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