Jul
6
Category: Rates | 
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This post was written by Bring the Blog
Mortgage markets were relatively calm throughout last week’s holiday-shortened trading sessions.After trading within a tight range between Monday and Wednesday, a weak jobs report helped edge rates lower into the weekend.
For the second week in a row, mortgage rates ended the week lower than where they started – if only slightly.
Meanwhile, if it’s the expectation of runaway economic growth that fueled the early-June, mortgage rate run-up past 6 percent, it’s the tempering of those expectations that helped rates retreat by a 1/2 percent or more since.
While the housing sector continues to post strong numbers, employment is showing that it may not rebound as quickly as previously thought and U.S. consumer confidence remains shaken.
The Unemployment Rate rose to its highest levels in 25 years last month and key confidence levels fell.
With negative job growth and falling consumer optimism, it only makes sense that mortgage rates would fall — fewer people are working and the public feels uneasy about spending its money.
This week — without much new data due — market momentum could push rates even lower. In general, perceived weakness in the economy will be good for mortgage rates and strength will be bad.
However, there’s a wildcard.
This week, some of the world’s largest nations are expected to call on a replacement for the U.S. dollar as a global currency reserve. Depending on how serious the discussion grows, the value of the U.S. dollar could be negatively impacted and that would spell bad news for rate shoppers.
A weakening U.S. dollar is linked to higher mortgage rates.
Mortgage rates remain favorable and unpredictable. If today’s rates make sense for your household budget, consider locking in. Rates won’t likely end the week at the same levels at which they started.
Jul
2
Category: Housing | Leave a Comment
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The number of homes under contract to sell increased in May.
It’s the fourth straight month in which sales volume increased, corroborating the growing notion that housing is on the mend in most U.S. markets.
Consider these other housing-related stories from the past month:
Put it all together and it looks like the housing market is about to reach its bottom (if it hasn’t already).
But just because homes are going under contract to sell doesn’t mean that they actually will sell. A “deal” can fall apart for all sorts of reasons including failed home inspections, buyer-seller disputes, and mortgage-related problems.
In general, though, as the number of pending contracts increase, we find that Existing Home Sales rise, too, some 45-60 days into the future. And so long as buyers’ demand for homes remains strong, we would expect that home prices edge higher.
It’s too soon to say that housing has turned the corner for certain, but there’s an awful lot of data lately that suggests that it has.
Jul
1
Category: Industry News | Leave a Comment
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Tuesday — for the first time in a long while — members of the press met the monthly Case-Shiller Index data with enthusiasm. And why shouldn’t they? 19 of the 20 measured markets showed a slowing pace of home price decline in April.Here are some of the headlines about the story:
Now, the headlines feel negative, but they’re actually highlighting some key strengths in April’s figures. For example, nearly half of the Case-Shiller markets posted gains in April and all but one showed month-over-month improvement.
It’s a step in the right direction but doesn’t mean that housing has turned around for good.
We have to be careful about how we interpret the Case-Shiller Index because it’s an imperfect housing gauge. The most obvious Case-Shiller flaw is that it only measures home values in 20 cities nationwide and they’re not even the 20 biggest cities.
Houston, Philadelphia, San Antonio and San Jose are excluded from the report and each ranks among the country’s 10 most populous areas.
That said, the report is still important because the Case-Shiller Index identifies broader housing trends and that helps to shape economic policy.
Not only versus last month but also versus last year, the pace at which home values are falling appears to be getting slower. This is the third straight month Case-Shiller has reported as such.
Now, three months makes a trend, but the data has to stay strong through the summer months to mark a bona fide turnaround. If the Case-Shiller Index shows strength for May and June, it could be the signal for which the markets have been waiting.
Jun
30
Category: Industry News | Leave a Comment
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At the start of the year, the “experts” made a lot of predictions about the U.S. economy and what to expect in 2009.
And nobody predicted just how big the government’s stimulus package would be.
Now, on June 30, with the year officially half-over, it’s as good a time as any to remember that people are much better at interpreting the past than predicting the future. Economists can make educated guesses about the future, but they’re guesses nonetheless.
It’s like watching the Weather Channel. A meterologist can look at the data and say it’s going to rain next week, but the forecast is never 100%.
So far this year, mortgage rates have been up and down, credit availability has been higher and lower, and home prices have varied immensely from neighborhood to neighborhood. These are not the types of predictions we get from the pundits.
There’s another 6 months until 2010 and there’s no reason to expect the current trends to change.
The world is unpredictable and so is the U.S. economy. Therefore, consider making your personal finance decisions based on the information at hand today instead of on an educated guess about the future.
After all, the weatherman’s been wrong before.
Jun
29
This week’s Crain’s Chicago Business (PDF) is reporting that the relative cost of owning vs. renting is swinging back in favor of home ownership across the U.S. and in Chicago. The Chicago real estate market is already seeing signs of this with an increase in pending home sales. There are great expectations that June’s sales numbers will finish off what should be a strong second quarter. Realtors® see this trend continuing as many of their buyers have reengaged and are actively looking at properties and going forward with offers. Tire kickers have become purchasers. As sellers have been adjusting their prices, buyers have making repositioning themselves regarding financing. Borrowers are expanding their lending options, taking advantage of the $8000 tax credit and creating greater equity in their purchase with larger down payments
Source - The Chicago 77 - http://www.thechicago77.com/2009/06/buy-or-rent-buying-is-starting-to-make-financial-sense-again
Jun
29
Category: Fed Funds Rate, Rates | Leave a Comment
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Mortgage markets improved last week on the heels of benign economic data and a non-inspired press release from the Federal Reserve.Aside from trader momentum, 3 market-moving events helped set the pace last week:
- Housing data hinted at strength
- Jobless data showed softness
- The Fed said growth appears on-track
The combination of the three created volatility that — for just the second time in the last 8 weeks — worked in favor of rate shoppers.
Mortgage rates changed a lot last week, but they trended lower overall.
Already, however, markets are looking ahead to this week’s holiday-shortened trading sessions. There is a ton of data to be released and as the week progresses, the ever-falling market volume could create some wide swings in mortgage rates.
The mystery is whether rates will be getting better or worse.
On Tuesday, markets will get Consumer Confidence and Case-Shiller Index data at 9:00 AM ET. The Case-Shiller Index is a home price measurement and it always gets a lot of press. Strength in either number should lead mortgage rates higher. Weakness should help rates ease.
Then, on Wednesday, Crude Inventories should take the spotlight. Normally, we don’t watch this data point too closely but with gas prices easing last week, rising oil supplies could mean even lower gas prices ahead. This is anti-inflation and a good sign for mortgage rates.
And lastly, on Thursday, the government releases June’s jobs report. This report is always a market-mover — good or bad. And with trading volume low by Thursday, mortgage rates should move more than “normal”.
Be ready to lock at a moment’s notice this week. Mortgage rates continue to be volatile and the holiday-shortened week won’t do anything to counter that. If you’re the nervous type, when you see a rate that fits your budget, consider locking it in.
Jun
26
Category: Housing | Leave a Comment
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If you only saw the headlines this week, you may have missed another positive sign in the housing market.According to the Census Bureau, the supply of newly-built homes for sale fell to 10.2 months in May, its lowest level in 10 months.
Unfortunately, the New Homes Sales story wasn’t positioned as a positively by the press. Instead, the most common headline on the data read “New Home Sales Dip 0.6%” with many journalists referring to the figures as “weak” or “disappointing”.
Only, that’s not completely true.
See, one of the nice elements of the monthly New Home Sales report is its footnote section in which the Census Bureau talks about statistical Margin of Error and that section tells us that if the Margin of Error is larger than the measurement itself, the report is useless.
And that’s exactly what happened in May.
New Home Sales were measured to have fallen by 0.6 percent but that data point was dwarfed by its 17.8 percent Margin of Error, The “headline data”, in other words, was just a guess.
The press reported it anyway.
Nonetheless, as it relates to the economy, falling home inventories are a positive. Having 10-plus months of homes on the market is still high historically, but a definite improvement over what we saw earlier this year.
So long as low mortgage rates and aggressive pricing persists from builders, we expect even less supply in the months ahead.
