South Orange County Blog from Bob Phillips

What’s Ahead For Mortgage Rates This Week – September 14, 2015

Whats Ahead For Mortgage Rates This Week September 14 2015A short week after the Labor Day Holiday provided a slack schedule for economic news. Bloomberg reported that residential investment for the second quarter of 2015 represented 3.34 percent of the Gross Domestic Product. Compared to the long-term average reading of 4.56 percent, analysts said that the Q2 15 reading suggested pent-up demand in the housing market that could help propel the economy through any setbacks that could occur when the Fed raises rates.

Pent-Up Housing Demand a Plus when Fed Raises Rates

Job openings rose in July to 5.75 million as compared to June’s reading of 5.32 million. This is a positive indicator for the economy and for the housing sector, as consumer confidence in terms of buying a home typically relies on stable employment and a strong labor sector.

While economic indicators are looking good for housing construction, analysts note that a shortage of construction workers could affect construction of new residential units. Analysts said that children born during the 1980’s will lead the next wave of first-time home buyers, with millennials following. This trend could last for the next 10 to 15 years and is expected to bolster housing markets.

More lenient mortgage lending requirements and rising confidence among home builders were also cited as positive indicators for housing.

Mortgage Rates Mixed

Freddie Mac reported that average fixed mortgage rates rose by one basis point to 3.90 percent for 30-year fixed rate mortgages and 3.10 percent for 15-year mortgages. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.91 percent. Average discount points for a 30-year fixed rate mortgage were unchanged at 0.60 percent and rose to 0.70 percent for 15-year fixed rate mortgages and to 0.50 percent for 5/1 adjustable rate mortgages.

Job Openings Rise as Weekly Jobless Claims Fall

July job openings rose to 5.75 million from June’s reading of 5.32 million; this was the highest number of available jobs since records have been kept. Analysts said that the high number of job openings clearly indicate that the labor force is not able to supply the workers needed by employers. Jobs available range from professional to service related work; this suggests a universal trend rather than hiring challenges within specific job areas.

Hiring activity fell in July to 4.98 million from June’s reading of 5.18 million. July separations also fell, which suggests that employers are having problems finding skilled workers and are holding on to experienced workers.

Weekly jobless claims fell to 275,000 from the prior week’s reading of 281,000 new jobless claims.

What’s Ahead

Next week’s scheduled economic reports include Retail Sales, Consumer Price Index and Core CSI along with the NAHB Wells Fargo Housing Market Index, Commerce Department reports on housing starts and building permits. The Fed’s Federal Open Market Committee will issue its customary statement on Wednesday, followed by highly-anticipated press conference by Fed Chair Janet Yellen.

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What’s Ahead For Mortgage Rates This Week – April 13, 2015

Whats Ahead For Mortgage Rates This Week April 13 2015Last week’s economic news included the minutes from the most recent FOMC meeting, which indicated that the Fed’s monetary policymakers are eyeing a potential increase in the target federal funds rate, but don’t expect to do so immediately.

Members of the Federal Open Market Committee expressed concerns about lagging housing markets and noted that inflation has not yet achieved the Fed’s two percent goal. When the Fed decides to raise its target federal funds rate, which now stands at 0.00 to 0.25 percent, Interest rates and mortgage rates can be expected to rise as well.

Mortgage Rates Lower, Jobless Claims Rise

Freddie Mac reported that mortgage fell last week. The average rate for a 30-year fixed rate mortgage fell by four basis points to 3.66 percent; the average rate for a 15-year mortgage dropped by six basis points to 2.93 percent. The average rate for a 5/1 adjustable rate mortgage was nine basis points lower at 2.83 percent. Discount points were unchanged across the board at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 281,000 against projections of 285,000 new claims and the prior week’s reading of 267,000 new claims. Analysts said that the Easter holiday week affected weekly jobless claims, and that the varied dates of the Easter holiday and spring break weeks for schools can impact weekly readings for new unemployment claims.

The four-week rolling average of jobless claims fell to its lowest reading since June 2000. The four-week rolling average is considered a more dependable source for identifying labor force trends, as it lacks the volatility associated with holidays and one-time events that can cause great variation in weekly readings for new jobless claims.

What’s Ahead

Next week’s scheduled economic reports include retail sales, retail sales not including the automotive sector, the Federal Reserve’s Beige Book report, which includes anecdotal reports of economic conditions reported to the Fed, and Housing Starts. The usual reports for weekly jobless claims and Freddie Mac’s mortgage rates survey will be released Thursday.

On Friday, the University of Michigan will release its Consumer Sentiment report, which provides indications of how American consumers view current economic conditions. While general in scope, consumer sentiment can suggest how consumers view buying homes.

A lack of positive sentiment about the economy in general and jobs in particular suggests that fewer Americans may be ready to buy homes. Increasing positive sentiment indicates less concern about economic conditions and could point to more Americans entering the housing market as the peak home- buying season gets underway.

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What’s Ahead For Mortgage Rates This Week – February 2, 2015

Whats Ahead For Mortgage Rates This Week Feburary 2 2015Last week’s economic reports included Case-Shiller 10 and 20-City Home Price Index reports for November along with new and pending home sales for December. Freddie Mac reported on average mortgage rates and new jobless claims dipped unexpectedly. The details:

Case-Shiller: Home Price Growth Slower in November

Case-Shiller’s 20-City Home Price Index for November indicated that home prices continue to slow across the nation. Seasonally-adjusted annual home price growth slowed to 4.30 percent from October’s reading of 4.50 percent. Slowing momentum in year-over-year home price growth placed downward pressure on month-to-month readings. Several cities, including Atlanta, Georgia, Boston Massachusetts and Cleveland Ohio reported lower home prices in November as compared to October. Chicago, Illinois surprised analysts with a -1.10 percent drop in home price growth for November. Although mortgage rates have fallen in recent weeks, analysts cited tough mortgage approval standards, lower demand for homes and growing inventories of available homes as factors contributing to sluggish housing markets.

New and Pending Home Sales: Mixed Readings

New home sales jumped to a seasonally-adjusted annual reading of 481,000 sales in December against expectations of 455,000 sales and November’s revised reading of 431,000 new homes sold. The original reading for November was 438,000 new homes sold. New home sales were 8.80 percent higher in December year-over-year. The median price of new homes was $298,100 in December, which was an increase of 8.20 percent year-over-year.

Pending home sales reflected sluggish market conditions in December with pending sales lower by -3.70 percent as compared to November’s reading of +0.60 percent. This lull will likely impact completed sales as pending sales generally forecast completed sales within the next 60 days. The National Association of Realtors® said that home prices rose in some areas as supplies dwindled. Fewer homeowners list homes for sale during the fall and winter months than during spring and summer. Analysts also said that home sales trends rely on the willingness of homeowners to list their homes and move up. Although the economy continues to grow, homeowners can impact supplies of available homes if they wait to move up to larger homes.

Mortgage Rates Rise, New Jobless Claims Fall

Freddie Mac reported that average mortgage rates rose last week. The average rate for a 30-year fixed rate mortgage was three basis points higher at 3.66 percent; the average rate for 15-year mortgages rose by five basis points to 2.98 percent, and the average rate for a 5/1 adjustable rate mortgage was 2.86 percent. Discount points fell to 0.60 percent for 30-year mortgages and 0.50 percent for 15-year mortgages. Discount points were unchanged at0.40 percent for 5/1 adjustable rate mortgages.

New jobless claims fell to 265,000; this was lower than the expected reading of 296,000 new jobless claims and the prior week’s reading of 308,000 new jobless claims. Analysts said that the short work week likely contributed to the drop in weekly jobless claims, which was the largest drop in new jobless claims since November 2012. As labor markets improve, more consumers can afford to buy homes. January’s Consumer Confidence Index rose more than expected in January with a reading of 102.9 against expectations of 96.90 and December’s reading of 93.10.

What’s Ahead

This week’s scheduled reports include Construction Spending, Personal Income, Core Inflation, and several employment reports including ADP Payrolls, Non-Farm Payrolls and the national unemployment rate. Freddie Mac’s mortgage rates report and new unemployment claims will be released on Thursday as usual.

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Small Business Owner? Here’s What You Need To Know About Mortgages

Small Business Owner? Here’s What You Need To Know About MortgagesIf you are an entrepreneur or a small business owner, you probably know that there are a lot of advantages to this lifestyle – the freedom, the exciting challenges, the opportunities and the ability to make a living doing what you love.

However, you also know that being a small business owner can make some things more challenging – such as apply for a mortgage for your home.

Many small business owners find it tough to get approved for a mortgage, because their income can be erratic and the banks want to see proof of consistent earnings over a significant period of time.

However, it is possible to qualify for a loan as a small business owner. Here are some important things that you need to know about the process:

Ask Your Mortgage Lender What They Look For

If you ask your mortgage lender, they will probably offer you a checklist for putting together all the information needed in your mortgage package. It should have instructions on what specific documents you need to include if you are self-employed.

Filling Out The Right Forms

When applying for the loan, you will need to fill out IRS Form 4506-T, which is a Request for Transcript of Tax Return. This is basically a form that will allow the lender to look at your tax returns from the IRS, which shows proof of your earnings.

You are not able to show lenders copies of your tax returns. They must get them directly from the IRS themselves.

Submitting A Profit And Loss Statement

It can also help to ask your accountant to prepare a Profit and Loss Statement, which highlights the amount of money that you have brought in compared to the expenses of setting up your business.

If you present several of these on a quarterly basis, it will prove to the bank that your business is growing and is profitable enough to cover your mortgage.

The important thing to remember is not to give up on the idea of owning a home just because you are a small business owner. Ask your accountant for help and take the time to submit the right proof of earnings, so that you get the mortgage for your dream home.

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What’s Ahead For Mortgage Rates This Week – April 21, 2014

What's Ahead For Mortgage Rates This Week - April 21, 2014Last week’s economic news supported the general outlook for moderate economic growth. Housing related news included the National Association of Home Builders / Wells Fargo Housing Market Index for April and Housing Starts for March.

NAHB: Builder Confidence Holds Steady Amid Concerns

The NAHB/Wells Fargo HMI for April ticked upward by one point to a reading of 47 against the March revised reading of 46. Home builders surveyed expressed concerns about high home prices, a lack of available lots for development and a labor shortage. Some desirable markets have been held back due to low inventories of available and/or affordable homes.

Builders surveyed for the HMI were asked to rate three components used in compiling the monthly index; these include current market conditions, market conditions expected over the next six months, and buyer foot traffic in newly built homes. April’s readings were 51, 57 and 32 respectively.

Readings for current market conditions and buyer foot traffic were unchanged from March, but builder confidence for market conditions in the next six months rose by four points.

Any reading above 50 indicates that more builders are confident about market conditions for newly-built single-family homes than not.

Housing Starts Pick Up After Winter Storms, But Fall Short Of Expectations

March Housing Starts rose by 2.80 percent at a seasonally adjusted annual rate of 946,000 starts as compared to expectations of 990,000 and February’s reading of 920,000 housing starts, which was revised from 907,000 starts.

The March reading represented a 5.90 percent decrease from March 2013, and is consistent with concerns expressed by home builders surveyed for the NAHB HMI for April.

Building permits issued for March were also lower by 2.40 percent at a rate of 990,000 permits issued. This slippage was largely due to the falling rate of building permits issued for apartment construction.

Higher home prices and mortgage rates along with inconsistent (but improving) labor markets were cited as reasons for builder pessimism, but analysts said that projects delayed by severe weather are expected to pick up in the coming months.

Mortgage Rates Fall, Discount Points Hold Steady

Last week’s average mortgage rates fell across the board according to Freddie Mac’s weekly Primary Mortgage Market Survey. The rate for a 30-year fixed rate mortgage fell by seven basis points to 4.27 percent. 15-year mortgages had an average rate of 3.33 percent as compared to the prior week’s reading of 3.38 percent. 5/1 adjustable rate mortgages had an average rate of 3.03 percent, down from 3.09 percent the previous week. Discount points were unchanged at 0.70, 0.60 and 0.50 percent respectively.

Fed Chair Upbeat In New York Speech

Federal Reserve Chair Janet Yellen struck a positive note in a speech given before the Economic Club of New York last Wednesday. She indicated that the Fed and many economists expect a return to full employment and stable prices by the end of 2016. Analysts characterized Yellen’s speech as upbeat on economic recovery and inflation, while “dovish” on monetary policy.

Ms. Yellen reiterated the Fed’s intention to monitor current and developing economic situations before making changes to its current monetary policy. She acknowledged that “twists and turns” in the economy could occur, and that Fed policy would shift as needed to address changes.

The Fed also released its Beige Book Report last Wednesday. This report indicated that the economy is recovering in most areas of the U.S.

This Week

This week’s scheduled economic news includes Leading Economic Indicators, Existing Home Sales for March, FHFA House Price Report for February and New Home Sales for March. The University of Michigan Consumer Sentiment report for April rounds out this week’s news.  

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What’s Ahead For Mortgage Rates This Week – December 30, 2013

What's Ahead For Mortgage Rates This Week- December 30, 2013The University of Michigan’s Consumer Sentiment Index was improved for December at 82.5, after the November reading was adjusted from 82.5 to 75. Analysts noted that consumers were relieved when legislative gridlock ended.

Durable goods orders reached their highest level since May with November’s reading of + 3.5 percent. Without the volatile transportation sector, the reading for November was +1.2 percent.

This could be a sign of economic recovery for manufacturing, as more orders are being placed. Economists expected an overall increase of 2.0 percent for overall durable goods orders.

The U.S. Commerce Department provided housing markets with good news with its New Home Sales report for November. 464,000 new homes were sold in November against expectations of 440,000 new homes sold.

This expectation was based on the original reading of 444,000 new homes sold in October, which has been revised to 474,000 new homes sold. The latest reading for October is the highest since July of 2008.

While rising mortgage rates slowed home purchases during the summer, analysts note that home buyers seem to be adjusting for higher mortgage rates by purchasing smaller homes in less costly areas.

Home Builder Confidence recently achieved its highest reading since 2005, a further indication of overall economic recovery and housing markets in particular.

After Wednesday’s holiday, the Weekly Jobless Claims report came in with a reading of 338,000 new jobless claims filed. This reading was lower than expectations of 345,000 new jobless claims and significantly lower than the previous week’s report of 380,000 new jobless claims.

This was the largest decrease in new jobless claims since the week of November 17, 2012. After seasonal volatility associated with the holidays, analysts expect new jobless claims to decrease at a slower rate in early 2014,

Freddie Mac released its Primary Mortgage Market Survey on Thursday. Although some economic analysts had expected a jump in mortgage rates after the Fed announced its plan to begin tapering its monthly securities purchases in January, mortgage rates showed little change.

The average rate for a 30-year fixed rate mortgage rose by one basis point to 4.48 percent with discount points unchanged at 0.70 percent. Average 15-year mortgage rates also rose by one basis point to 3.52 with discount points moving up from 0.60 to 0.70 percent.

The average rate for a 5/1 adjustable rate mortgage rose by 4.00 basis points to 3.00 percent, with discount points unchanged at 0.40 percent.

2014 shows promise of a steady economic improvements, and given the latest New Home Sales report, it’s possible that improving housing markets will continue leading the way.

What’s Ahead

As with last week, this week’s schedule of economic events is reduced due to the New Year holiday. Pending home sales for November will be released Monday, Tuesday’s economic reports include The Case/Shiller Housing Market Indices and the Consumer Confidence report.

After the holiday on Wednesday, Thursday’s scheduled reports include the Weekly Jobless Claims and Freddie Mac PMMS on mortgage rates. Construction Spending will also be released. There is no housing or mortgage-related economic reports set for release on Friday.

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What’s Ahead For Mortgage Rates This Week – December 16, 2013

Posted in Financial Reports, Housing Analysis, Jobs, mortgage rates, Mortgage Rates, Real Estate Trends, The Economy by southorangecounty on December 16, 2013

What's Ahead For Mortgage Rates This Week - December 16 2013Mortgage Debt Rises For First Time Since Recession

Last week was relatively quiet concerning scheduled housing-related news, but the Federal Reserve’s financial accounts report, released on Monday, indicated that mortgage debt in the U.S. had increased for the first time since the first quarter (Q1) of 2008.

Mortgage debt increased by a seasonally-adjusted annual rate of $87.4 billion, or 0.90 percent. Mortgage debt remains approximately 12.00 percent below pre-recession levels.

Increasing debt is not often considered good news, but in the case of mortgage debt in today’s economy, it suggests economic recovery in the form of higher home prices and fewer foreclosures.

Another instance of counter-intuitive economic results was released Tuesday. The Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS) report for October.

JOLTS indicated that 2.39 million workers quit their jobs in October. This was the highest number of jobs quit since 2008. While this may appear counter-productive to a growing economy, it indicates that workers are leaving their jobs for better positions.

Mortgage Rates Fall, Federal Budget Deficit Shrinks

On Wednesday the U.S. Treasury announced that November’s federal budget deficit had shrunk to -$135 billion from November 2012’s deficit reading of -$172 billion. This represents a year-over-year deficit decrease of 21 percent.

Freddie Mac’s Primary Mortgage Market Survey (PMMS) report provided good news as average mortgage rates fell last week. The average rate for a 30-year fixed rate mortgage fell from 4.46 percent to 4.42 percent. Discount points rose from the previous week’s reading of 0.50 percent to 0.70 percent.

15-year fixed rate mortgage rates fell from 3.47 percent to an average reading of 3.43 percent, with discount points rising from the prior week’s reading of 0.40 percent to 0.70 percent.

The average rate for a 5/1 adjustable rate mortgage dropped from 2.99 percent to 2.94 percent with discount points unchanged at 0.40 percent.

Lower mortgage rates are good news for home buyers facing higher home prices.

Weekly jobless claims rose last week. The previous week’s reading of 300,000 new jobless claims was short-lived as the reading for new jobless claims rose to 368,000 last week and surpassed a consensus of 335,000 new jobless claims.

Financial analysts cautioned that employment data can be volatile during the holidays, and noted that the four-week average of new unemployment claims rose by 6000 to 328,750.

Whats Coming Up

There are several significant releases set for housing-related news. The NAHB housing market index, Housing Starts, and Building permits indicate how current builder confidence and new construction may impact the supply of available homes.

On Wednesday, the FOMC will issue its usual statement at the conclusion of its two-day meeting. Some analysts expect an announcement concerning the Fed’s quantitative easing policy; Outgoing Fed Chair Ben Bernanke is set to give a press conference after the FOMC statement.

In addition to the weekly jobless claims report and Freddie Mac’s PMMS, Reports on Existing Home Sales and Leading Economic Indicators will also be released.

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Real Estate Quiz: Thinking of Moving Up?

Posted in Home buying, Home Selling, Mortgage Rates, New Home Sales, Pending Home Sales, Real estate by southorangecounty on October 13, 2012

An article by Carla Hil, of Realty Times. ( RealtyTimes.com )

Attractive interest rates and bottomed-out home prices have many homeowners wondering if now is the time to make a move. Is the climate right for purchasing that dream home? It all depends on your personal needs, finances, and of course, the state of your local housing market. Find out if now’s the time to make a move by taking this quick quiz.

• How much do you owe on your home? Many homeowners today find themselves owing more than their homes are worth. These owners should think long and hard before selling homes at a loss.

• What are your housing needs in the decade to come? Are you a new couple expecting to expand your family? Today’s market presents great deals that can facilitate you moving up to a bigger home.

• Are you nearing retirement age? While it may be appealing to buy the dream McMansion you’ve had your eye on, it’s important to remember that bigger homes require bigger maintenance, something many seniors look to avoid.

Still other families are moving up to bigger homes that have the room for multiple generations.

• Are you willing to take on a larger mortgage? Even though interest rates are low, a larger home will not only cost more in taxes and utilities, but you could also find yourself with a steep mortgage payment.

• Do you have an 8-month emergency fund? There is still much uncertainty in the job market. Every household should be sure to saved back at least 8 months worth of cash for an emergency fund.

• How are your retirement savings? The same line of thought applies to number five. Housing isn’t turning out to be quite the booming investment it once was and while home prices are starting to rebound, a home is never a substitute for a solid retirement plan that is in full swing.

• Why are you buying? Is it for more space, a better school district, or to take advantage of today’s screaming deals? These can all be admirable pursuits. Are you instead buying for the status and prestige of a neighborhood? Homeownership is still a hefty responsibility, even with low interest rates and high levels of affordability. It should never be entered into lightly.

• How quickly are homes selling? Most households cannot afford to carry two mortgages, so be sure that you are able to sell your home first before buying that dream home. Talk to your local real estate agent about the current market conditions, such as how long a home is taking to sell, sale prices, etc.

• What do you need? This last question is more philosophical and may take some extra time and thought. After the 2009 recession, many consumers are asking themselves, “What do I really need?” Wants versus needs are sometimes a hard pill to swallow in a consumer-driven society, but many families are finding that they are happier with smaller homes and more family time.

There are great deals to be had in today’s market. If your family is ready, financially and emotionally, for a move up, then be sure to contact me for more details on the condition of your neighborhood’s market, and for some of today’s best opportunities.

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More underwater borrowers shorten mortgage under HARP

From HousingWire.com,         By Jon Prior           July 16, 2012

More Fannie Mae and Freddie Mac borrowers who owe more on their mortgage than their home is worth chose to refinance into shorter-term loans in order to rebuild equity faster, according to theFederal Housing Finance Agency.

Roughly 19% of homeowners who are more than 5% underwater chose 15- and 20-year terms when offered a workout under the Home Affordable Refinance Program. That percentage is more than double the average in 2011, according to the FHFA report.

Borrowers can move from a 6% or 7% loan into today’s mortgage rates, which seem to be breaking record lows every week. Keeping the monthly payment the same but with this lower interest allows them to put more of their dollars to the principal. This, in turn, helps them rebuild equity faster. Most underwater borrowers still remain current on their payments.

Department of Housing and Urban Development Secretary Shaun Donovan held a Google Hangout meeting online with homeowners last week, touting several bills that could possibly extend more refinancing opportunities to underwater borrowers.

One bill from Sen. Jeff Merkley, D-Ore., would allow borrowers to refinance their loans into even shorter-term limits and Fannie and Freddie would cover any closing costs.

FHFA expanded the program last year, stripping out limitations on loan-to-value ratios and some repurchase risk on the original loan file. It also waived appraisal requirements and other upfront fees to boost the program.

HARP spiked in the first quarter when 180,000 Fannie and Freddie borrowers received a refinance under the program. Nearly 80,000 went through HARP in March alone.

HARP accounted for 20% of all refinancing activity in May, the highest percentage since the program launched.

According to FHFA data released Monday, another 117,000 borrowers went through HARP in April and May, though June numbers are not yet available.

Of those, roughly 30,000 had LTVs between 105% and 125%, the original ceiling on the program.

Nearly 6,000 borrowers went through HARP with an LTV score higher than 125% in April and May.

Analysts at Barclays Capital said in a report over the weekend that some servicers are beginning to slow HARP refinancing, according to the latest data in July, though Bank of America, the largest GSE servicer, is still ramping up production.

More than 11 million borrowers are underwater on their mortgage, though that number is declining. More than 4 million hold loans owned by Fannie and Freddie.

“These numbers show HARP 2.0 is accomplishing the goals set forth—to provide relief to borrowers who might otherwise be unable to refinance due to house price declines,” said FHFA Acting Director Edward DeMarco in a statement. “Borrowers with Fannie Mae- or Freddie Mac-backed loans who are current on their underwater mortgages are taking advantage of the opportunity offered by HARP 2.0.”

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