Another Sign of Housing Strength – Purchase Applications Rise:
Applications for U.S. home mortgages edged up last week, boosted by stronger demand for purchases for the second week in a row.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 0.1 percent in the week ended April 27.
The MBA’s seasonally adjusted index of loan requests for home purchases gained 2.9 percent, but the gauge of refinancing applications slipped 0.7 percent.
The refinance share of total mortgage activity eased to 72.6 percent of applications from 73.4 percent the previous week.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to the MBA.
This two week trend of stronger applications for a mortgage to purchase a home mirrors the much better than expected Pending Home Sales report last week.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained +50 basis points from last Friday to the prior Friday which caused mortgage rates to move lower.
The highest rates of the week were on Tuesday and the lowest rates of the week were on Friday.
MBS traded in a very narrow range all week as we had a mixed bag of economic news.
But MBS moved sharply higher (causing lower mortgage rates which move in an inverse direction) on the much weaker than expected Unemployment data. Yes, the Unemployment Rate dropped from 8.2% to 8.1% – on the surface that would appear to positive for the job picture. But the Unemployment Rate is an outdated and highly manipulated calculation based upon very old technology (phone surveys), the vast majority of economists and traders put little stock in that number.
Instead, they focus on the Non-Farm Payroll data. This is calculated using peoples paychecks and is considered to be much more accurate. And with this latest Non-Farm Payroll data, the market received a big disappointment. The market was expecting a gain of approximately 165K jobs. But instead, we only saw a gain of 119K. This miss to the down side caused bonds to rally (they generally react well to poor economic news).
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Quote of the week:
“Alternatives to foreclosure, such as loan modifications and short sales, are being used to clear out inventory…and at the same time, there were fewer homes awaiting foreclosure.” – Anand Nallathambi, chief executive officer of CoreLogic
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Home Sales Increase to Near Two Year Highs:
Contracts to purchase previously owned homes increased solidly to a near two-year high in March, suggesting the spring selling season got off to a firmer start and offering hopes of a pickup in housing.
The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed in March, jumped 4.1 percent to 101.4, the highest level since April 2010.
March’s strong rise in signed contracts pointed to a pick up in home resales after they stumbled in the past two months.
“First quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good,” said Lawrence Yun, chief NAR economist.
Signed contracts were up 12.8 percent in the 12 months to March.
Contracts rose strongly in the South and West, but fell in the Northeast and Midwest.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) lost just -1 basis point from last Friday to the prior Friday which caused mortgage rates to move sideways.
The highest rates of the week were on Wednesday and the lowest rates of the week were on Monday.
MBS traded in a very narrow range all week as we had a mixed bag of economic news.
Durable Goods Orders, New Home Sales, Initial Jobless Claims and the 1st quarter GDP were all worse than expected and provided some support for bonds. But Consumer Sentiment, Pending Home Sales and Fed action were negative for bonds and kept a cap on any material gains.
The Federal Reserve Open Market Committee (FOMC, aka “The Fed”) left their key interest rate alone and basically made a carbon copy of their last policy statement. They basically told the market that there was no need for any additional stimulative measures at this time, nor do their projections show that further easing would be needed in the future. However, if the economy did turn from its current positive direction they are prepared to step in.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Quote of the week:
“First quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good.” – NAR economist Lawrence Yun
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Housing Supply Decreases, Good for Housing:
In the latest release of the National Association of Realtors’ Existing Home Sales report, there were some very interesting facts. Even though they reported a month-over-month decrease of 2.6% in existing home sales, they revised February’s data upward. The NAR said even with March’s decline, the pace of sales in the first three months of the year marked the strongest first quarter since 2007.
But the real gem is the inventory data. The nation’s glut of unsold homes is easing, as inventories fell to 2.37 million. Realtors in some markets have even reported shortages of housing stock. A decrease in the amount of homes on the market is always good for housing as it stabilizes and even drives prices upward. Nationwide, the median price for a home resale rose to $163,800 in March, up 2.5 percent from a year earlier.
An improving labor market has realtors upbeat about sales prospects for the rest of the year.
Distressed home sales accounted for only 29 percent of resales, down from 34 percent in February, which is also a very positive trend.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained +15 basis points from last Friday to the prior Friday which caused mortgage rates to move sideways.
The highest rates of the week were on Tuesday and the lowest rates of the week were on Friday.
MBS traded in a very narrow range all week as we had a light week in terms of the economic data that was released.
Retail Sales were much better than expected but Initial Jobless Claims and Existing Home Sales were worse than expected, there were no major Treasury auctions to guide the market last week.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Quote of the week:
“An improving labor market has realtors upbeat about sales prospects for the rest of the year.” – NAR economist Lawrence Yun
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Housing Poised for Spring Recovery:
Five years after the U.S. housing bust sent sales and prices plunging, the spring home-buying season is pointing to a long-awaited recovery.
Reduced prices, record-low mortgage rates, higher rents and an improving job market appear to be emboldening many would-be buyers.
Open houses are drawing crowds. A wave of foreclosures is leading investors to grab bargain-priced homes.
And many people seem to have concluded that prices won’t drop much further. In some areas, prices have begun to tick up.
“The biggest challenge that we’ve had over the past four years is fear — fear that the economy is collapsing, that property values are collapsing, that the world is coming to an end,” says Mark Prather, a broker at ERA Buy America Real Estate in La Palma, Calif. “The fear factor is all but gone.”
The spring buying season got an early lift-off from an uncommonly warm January and February — a winter that was the best for sales of previously occupied homes in five years. Permits to build houses and apartments rose in February to their highest level since 2008.
“People feel much more confident,” said Steve Brown, co-owner of real estate company Irongate Inc. of Dayton, Ohio, who says sales jumped more than 16 percent for the first two months of 2012 over the same period last year. “There’s no question there’s a good feeling in the marketplace.”
Some analysts detected a slight uptick in prices for February and March. CoreLogic, a real estate data firm, says prices for homes not at risk of foreclosure — about two thirds of the market — rose 0.7 percent in February. It was the first increase in four years. Price gains occurred both in some hard-hit areas, such as Phoenix, and some still-thriving areas like New York and Washington.
Also fueling interest are signs that home values are finally stabilizing. One factor that had slowed purchases after the housing boom ended in late 2006 was fear that a home would lose value soon after its purchase.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained just +3 basis points from last Friday to the prior Friday which caused mortgage rates to move sideways.
The highest rates of the week were on Wednesday and the lowest rates of the week were on Tuesday. The difference between our best and worst pricing for the week was a whopping 109 basis points which shows a lot of volatility.
Mortgage rates dipped Tuesday afternoon in reaction to global concern over Spain and Italy’s debt woes. Mortgage rates then reversed course and increased both Wednesday and Thursday in reaction to the release of the Fed’s Beige Book (named for the color of its cover). The Beige Book contains the economic data that the Fed will use to base their next policy move. In this report, the economic conditions in most districts were improving which led investors to believe that there would be a reduced chance for the Fed to have another round of quantitative easing.
Mortgage rates then reversed course again, and improved on Friday in reaction to a weak stock market and milder than expected University of Michigan Consumer Sentiment reading.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Quote of the week:
The biggest challenge that we’ve had over the past four years is fear — fear that the economy is collapsing, that property values are collapsing, that the world is coming to an end – the Fear Factor is all but gone now. – Mark Prather, a broker at ERA Buy America Real Estate in La Palma, Calif.
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Factory Orders Continue Rebound
Businesses ordered more machinery and equipment from U.S. factories in February, a signal that many are investing in their companies despite the expiration of a tax credit.
This is positive news for the housing market as increased demand for manufacturing signals stronger consumer sentiment.
Orders to U.S. factories increased 1.3 percent in February, the Commerce Department said. That offset a similar decline in January.
U.S. factories stepped up hiring and production in March, based on a report Monday from the Institute for Supply Management.
The trade group of purchasing managers said its index of manufacturing activity rose to 53.4 in March, up from a February reading of 52.4. Readings above 50 indicate manufacturing is expanding.
Manufacturing has been a key source of economic growth since the recession ended in June 2009.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained +70 basis points from last Friday to the prior Friday which helped mortgage rates to decrease (Mortgage rates have an inverse relationship to mortgage backed security prices).
The highest rates of the week were on Tuesday and the lowest rates of the week were on Friday.
Mortgage rates shot up Tuesday afternoon after the release of the minuets from the last Fed meeting.
As traders deciphered the minutes, it became clear to them that a third round of quantitative easing would not be in the cards. This caused MBS to sell off and forced mortgage rates higher.
But everything changed on Friday.
The MBS market reacted sharply to the disappointing employment data.
The headline Unemployment Rate dropped from 8.3% to 8.2% but traders largely ignore this data as it is the results of a verbal phone survey.
Traders focus instead on the Non-Farm Payroll data which did show that the economy added 120,000 jobs. While job growth is good, this was a big decrease from the prior month where the economy added 240,000 jobs. This disappointing employment news caused traders to speculate that further Fed action may be needed (a complete reversal in thought from Tuesday afternoon) and made MBS attractive again. This new demand for MBS helped to push mortgage rates lower.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Quote of the week:
“The biggest source of unfinished business in the financial reform effort is in the housing finance area…Fannie Mae and Freddie Mac are “not a source of systemic risk” now” – Treasury Secretary Geithner
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
New York Times: Bottom Near for Housing
For real estate, some economists say, an end to the seemingly endless decline in housing values might be in sight.
Few analysts expect housing prices to rebound anytime soon. But quite a few are predicting that the market is close to the moment when things will stop getting worse, which will be a major improvement all by itself. “By far the bulk of the downturn of housing prices is beyond us,” said Paul Dales of Capital Economics.
“There are some amazingly favorable signs. Housing is the most undervalued it’s been in 35 years,” Mr. Dales said. “At some point, it’s going to do very well.”
Peter Muoio, senior principal of Maximus Advisors, says he thinks the market has already bottomed, although he expects it to bounce around in a narrow range for a few years rather than recovering. And James F. Smith, chief economist for the investment firm Parsec Financial and a rare housing bull, is predicting a 25 percent climb from here by mid-decade.
“There’s a lot of pent-up demand for housing and someday it will be unleashed,” Mr. Smith said, adding: “Your guess is as good as mine when it will come.”
What Happened to Rates Last Week:
Mortgage backed securities (MBS) jumped another +44 basis points last week after rising +47 basis points the prior week which pushed 30 year fixed mortgage rates to their best levels of 2011.
U.S Treasuries and Mortgage Backed Securities both saw very strong demand as another rating agency once again downgraded Greece’s credit rating which heightened concerns over the very real threat that Greece and a couple of other counties in the European Union will have to default on their massive debts. We also got a huge dose of much weaker than expected U.S economic data. The national Unemployment Rate increased and Factory Orders, Vehicle Sales, and other reports were much weaker than expected which also helped MBS pricing and helped to improve mortgage rates.
What to Watch For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Foreclosures Decline Again:
Foreclosure activity decreased in April for the seventh straight month, bringing total foreclosure activity to a 40-month low, according to a new report from RealtyTrac.
“This slowdown continues to be largely the result of massive delays in processing foreclosures, rather than the result of a housing recovery that is lifting people out of foreclosure,” notes RealtyTrac CEO James Saccacio in a statement.
Certainly there are more foreclosures on the horizon, but this legal bottleneck will be around for awhile. This means that a massive wave of additional inventory will not be hitting the markets during the peak purchasing season. Inventory levels are the key to home prices and any stabilization in those inventory levels regardless of the reason is welcome news to the housing industry even if it is only temporary.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) barely moved and lost only -3 basis points last week which helped to keep 30 year fixed rates at fantastic levels. Mortgage rates continue to enjoy artificial support due to weakness in Europe – particularly with Greece and Portugal. Concerns over their massive debt restructuring has investors very concerned about the stability overseas and as a result they continue to purchase U.S. Treasuries and Mortgage Backed Securities which help to keep our rates low due to the extra demand.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Employment Picture Continues to Help Housing:
The national Unemployment Rate surprised forecasters by dipping below the important 9.0% mark. The Unemployment Rate in February dropped to 8.9% and continued its downward trend from our peak levels which occurred just after our last recession.
Of particular note is the Non-Farm Private Payroll data which showed an increase of 192,000. This is very important for housing. The housing mantra used to be “location, location, location”.
But now it is “jobs, jobs, jobs”. Simply put, the lower the Unemployment Rate – the greater demand there is for housing.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +7 basis points from Monday’s open to Friday’s close which helped to move mortgage rates down slightly. Mortgage Backed Securities sold off in the middle of the week, causing mortgage rates to rise, on much stronger than expected economic data. However, in the end - it was all about oil prices as MBS sold off on Friday on concerns that higher gas prices would dampen our economic recovery.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Proposed Housing Overhaul Will Increase Rates:
The Obama administration released their ideas on how to overhaul Fannie Mae, Freddie Mac and the Federal Housing Administration. Currently, all three issue mortgage backed securities that are backed or guaranteed by you the tax payer. This gives these securities very low risk and has great appeal to foreign investors that seek low risk. This is why your mortgage rates are still historically very low.
However, the proposed changes will enable the government to ease away from being such a big player in the mortgage business, moving from 95% of the total market down to as low as only 40% of the total market. By doing so, rates will naturally adjust upward to equalize with the new risk levels. These proposed changes will take a long time to pass and to be put into effect, so take advantage of today’s low rates and loan programs now while housing prices are still very affordable.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -42 basis points last week which caused 30 year fixed rates to move higher and closed at their highest levels of 2011. As we have discussed several times, mortgage rates are pushed lower when the economy is performing poorly and their is little to no risk of inflation. So, as the economy continues its upward march out of the recession, mortgage rates are pushed upward on the stronger growth and inflationary concerns. We had a couple of strong economic reports last week. The weekly Initial Jobless Claims were much lower than expected and Wholesale Inventories saw stronger gains. Both were positives for the economy and therefore negative for mortgage rates.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
Jobs, Jobs, Jobs:
Three major jobs reports were released last week and all showed unexpected strength – all of which is good for the housing market.
Friday’s Unemployment Report stunned economists by dropping from 9.4% to 9.0%. The Unemployment Rate has now dropped from 9.8% to 9.0% in just two months. But many question the drop due to how the data is collected via phone surveys, so lets focus on two other reports that hit last week which are much more scientific.
The ADP Private Payroll report showed much stronger than expected growth. They reported that private corporations hired 187,000 people last month. Economists had expected a gain of only 151,000. The Challenger Job Cuts report measures downsizing. This report showed that the number of layoffs companies have announced plunged 34% in December to its lowest level in 13 years.
As the employment picture continues to brighten, it will add fuel to the very strong levels of Existing Home Sales that we have seen over the past two months.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -135 basis points last week which caused 30 year fixed rates to move higher. Mortgage rates increase each and every day last week and closed at their highest levels of 2011. As we have discussed several times, mortgage rates are pushed lower when the economy is performing poorly and their is little to no risk of inflation. So, as the economy continues its upward march out of the recession mortgage rates are pushed upward on the stronger growth and inflationary concerns.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brian Able
Senior Loan Officer
Office: 303-840-0966
Cell: 303-807-9645
brian@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com.com
If you enjoyed this article, please consider sharing it!
