Estimated rates for the week of July 27th, 2009*
30 yr conforming fixed: 5.125 - 5.250
30 yr jumbo: 5.750 - to $600k
7/1 ARM 4.875 - 5.125
FHA/VA 5.250 - 5.50
OR Vet 4.75 w/1.50 - 4.875 w/1.00
As you can see rates are still very favorable. Mr. Bernanke spoke to Congress last week and his testimony assured the markets that the Fed would not let inflation get out of control. He mentioned that there are numerous ways for the Fed to tighten credit without actually having to increase interest rates. He said that he sees rates being low for a long time (at least well into next year), he said doesn't see inflation becoming an issue any time soon, and felt that the economy would start to slowly recover. With a lot of capacity still remaining in our system, any increase in consumer prices will remain subdued. It was great news for rates and we saw a nice movement downwards. Tempering that was - and will remain so - the need for the U.S. to borrow significant amounts to fund our deficit. All said, it appears that we should remain in a range for mortgage rates of 5.00 to 5.50%. When looking at rates over the last 30 years, it wasn't until April of 2002 - just a little over 7 years ago - that rates moved below 7.00 and stayed there. There is a good chance we will see those rates again - but it won't be for another year or more.
The 1st time tax credit has been motivating many buyers to get in their first home. Just heard that there is another bill up to extend and increase the credit. I wouldn't bet on it though. Granted, for our business, it would great and I hope it happens but with the deficit where it is, there won't be a lot enthusiasm to add to it. Given that and where rates sit today, I would encourage our first time homebuyers to get out there and buy.
New rules on disclosures take effect this week. With applications dated on or after July 30th, new rules promulgated with the passage of the Housing and Economic Recovery Act (HERA) require that lenders follow a number of timelines for the disclosure of loans. These disclosure rules apply to all real estate loans for primary residences and second homes. There are new time frames for when we can order an appraisal, there are re-disclosure requirements that occur if the APR changes by more than .125%, and there are new waiting requirements. Although this is a policy that is to protect consumers, I can see that there will be many unintended consequences. We will see transactions get postponed due to these new requirements. Since this policy is very new, it will take some time to get adjusted. Patience will definitely be a virtue over the next few months. It appears that a key point for all of us is that we should get the borrowers' loan terms and transaction terms set at least two weeks prior to close. That means locks should be in, any and all seller credits negotiated, the loan program, down payment, and all other terms should be finalized two weeks (or more) prior to loan documents going out. It won't be easy but, if we all work together, we'll get through this change too. I'll update you on this as time goes on.
In case you missed it, here's the petition web site again for the HVCC recall: http://www.hvccpetition.com/
Have a great week!
Bob Chiodo, CFP
Wednesday, July 29, 2009
Monday, July 27, 2009
New homes sales soar unexpectedly
I was hoping the market would show what I've been seeing, and according to this article it is!
By Les Christie, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) -- Sales of newly constructed single-family houses spiked 11% in June to an annualized rate of 384,000 homes.
The gain over May was much greater than expected. A consensus of housing industry analysts had forecast seasonally adjusted sales of 352,000, according to Breifing.com. However, sales are still 28% below the levels of a year ago, when new homes sold in June at an annualized rate of 530,000.
Four years ago, during the height of the housing boom, the sales rate for June was 1,374,000, nearly three-and-a-half times higher than last month.
"That is really good news," said Peter Morici, an economics professor at the University of Maryland who had forecast June sales to be at the 350,000 level. "Considering what's going on in existing home sales, with all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out."
Builders have been a little more optimistic about market conditions lately and this report should further buoy their spirits. An index of builder confidence from the National Association of Home Builders rose to 17 this month after languishing in single-digit territory.
As a result, builders have stepped up their pace of construction; in June, they began building single-family housing units at an annualized rate of 470,000, a 14.4% jump over May.
The median price paid for a house sold in June 2009 was down about 3% to $206,200; the mean price was $276,900.
By the end of the month, the inventory of new homes had dropped to 281,000, an 8.8 month supply at current rates of sale. Last month, there were enough homes on the market to last 10.2 months at that rate
By Les Christie, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) -- Sales of newly constructed single-family houses spiked 11% in June to an annualized rate of 384,000 homes.
The gain over May was much greater than expected. A consensus of housing industry analysts had forecast seasonally adjusted sales of 352,000, according to Breifing.com. However, sales are still 28% below the levels of a year ago, when new homes sold in June at an annualized rate of 530,000.
Four years ago, during the height of the housing boom, the sales rate for June was 1,374,000, nearly three-and-a-half times higher than last month.
"That is really good news," said Peter Morici, an economics professor at the University of Maryland who had forecast June sales to be at the 350,000 level. "Considering what's going on in existing home sales, with all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out."
Builders have been a little more optimistic about market conditions lately and this report should further buoy their spirits. An index of builder confidence from the National Association of Home Builders rose to 17 this month after languishing in single-digit territory.
As a result, builders have stepped up their pace of construction; in June, they began building single-family housing units at an annualized rate of 470,000, a 14.4% jump over May.
The median price paid for a house sold in June 2009 was down about 3% to $206,200; the mean price was $276,900.
By the end of the month, the inventory of new homes had dropped to 281,000, an 8.8 month supply at current rates of sale. Last month, there were enough homes on the market to last 10.2 months at that rate
Wednesday, July 22, 2009
Wow, Activity is WAY up!
Well, I was sitting here and realizing that I've been a complete slacker when it comes to my blogging. It's amazing how activity will suddenly make you start pushing things off of your calendar. Over the last couple of months I have seen a huge amount of action in the Portland real estate market. I will use a collective 'we' in talking about all of the local agents, and we had a rough first part of the year. With the snow, the presidential change, the bailout, and the stimulus, people didn't know what to do. Now that the dust has settled suddenly everyone is doing it all at once.
Oregon is a cyclical state in general so some additional activity is to be expected. When the sun comes out and the schools are done for the summer break, people come out of the woodwork. However, I have never seen it go from so little to so much so quickly. I think the fact that rates are good but going up also helped to give a little nudge. If you were waiting for better rates, or for prices to come down, you could be missing the boat. As rates go up, it can more than make up for any additional drop in price. I've seen rates go from 4.5% up to about 5.25%. If they get up around 6% or higher the effect on monthly payment will far outweigh the loss in value. Do the math, it's worth it.
With the sun out, I hope everyone is enjoying it in Oregon. There is no better place in the world than Oregon in the summer!
Oregon is a cyclical state in general so some additional activity is to be expected. When the sun comes out and the schools are done for the summer break, people come out of the woodwork. However, I have never seen it go from so little to so much so quickly. I think the fact that rates are good but going up also helped to give a little nudge. If you were waiting for better rates, or for prices to come down, you could be missing the boat. As rates go up, it can more than make up for any additional drop in price. I've seen rates go from 4.5% up to about 5.25%. If they get up around 6% or higher the effect on monthly payment will far outweigh the loss in value. Do the math, it's worth it.
With the sun out, I hope everyone is enjoying it in Oregon. There is no better place in the world than Oregon in the summer!
Wednesday, July 1, 2009
Obama widens mortgage refi program
NEW YORK (CNNMoney.com) -- The Obama administration is widening its mortgage refinancing program to allow more borrowers hit hard by falling home prices to take part.
Borrowers whose loans are now worth up to 125% of their home's value are now eligible to refinance their homes under the Obama foreclosure prevention plan announced in February. Previously, the limit was 105%.
The move acknowledges that home prices in many areas have fallen so far that many people were shut out of the program. Some 67% of homeowners in Las Vegas -- one of the hardest hit areas where Housing Secretary Shaun Donovan announced the expansion Wednesday -- owe more than their homes are worth.
More than one in five borrowers are now underwater, with homes in parts of California and Florida losing more than 50% of their value, according to Zillow.com, a real estate Web site. Some 20 million people own homes worth less than their mortgages.
"The president's Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today's announcement we will extend its reach still further," said Donovan.
How many more people will be drawn to the program now, however, remains a question, especially since mortgage rates are on the rise. Administration officials do not have an estimate.
Borrowers whose loans are now worth up to 125% of their home's value are now eligible to refinance their homes under the Obama foreclosure prevention plan announced in February. Previously, the limit was 105%.
The move acknowledges that home prices in many areas have fallen so far that many people were shut out of the program. Some 67% of homeowners in Las Vegas -- one of the hardest hit areas where Housing Secretary Shaun Donovan announced the expansion Wednesday -- owe more than their homes are worth.
More than one in five borrowers are now underwater, with homes in parts of California and Florida losing more than 50% of their value, according to Zillow.com, a real estate Web site. Some 20 million people own homes worth less than their mortgages.
"The president's Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today's announcement we will extend its reach still further," said Donovan.
How many more people will be drawn to the program now, however, remains a question, especially since mortgage rates are on the rise. Administration officials do not have an estimate.
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