Home Builder Confidence Improves as Mortgage Rates Stay Low

Home Builder Confidence Improves as Mortgage Rates Stay Low

by Ed Ferrara

As mortgage rates have continued to stay low, builders' confidence has improved for the fourth consecutive month in August according to the National Association of Home Builders/Wells Fargo Housing Market Index. Increasing 2 points to 37, the index is at its highest level since February, 2007. This report is a survey of builders' outlook for single family homes sales and expectations of sales for the next six months.

In addition to this index, Building Permits increased 6.8% as reported by the U.S. Census Bureau and Department of Housing and Urban Development and was at the highest level since August, 2008. Numbers going forward are looking positive for builders with the real estate market showing signs of recovery and affordability even though it still remains fragile.

This past week, FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates remained steady with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, all available with 0.7 to 1% origination fee. To obtain these low mortgage rates, borrowers must have good credit and the qualifications needed for approval. Home purchase loans and regular mortgage refinances require documentation and verification of employment, income and assets.

On the other hand, HARP (Home Affordable Refinance Program) offers underwater borrowers the chance to refinance without the need of an appraisal or other documents. Eligibility requires that the borrower have a mortgage that was sold to Fannie Mae or Freddie Mac prior to June 1, 2009. HARP mortgages have been on the increase since the expansion of the program that includes all underwater mortgages with the removal of loan to value caps. While some borrowers may find obtaining HARP difficult, this should not be the case. All borrowers can inquire online about HARP where there are numerous lenders available to accommodate all types of circumstances.

With FHA still offering low down payments and easier credit qualifying, there remains continued concern with their exposure to risk and rates of foreclosures. Nevertheless, FHA loans remain a major player in the mortgage industry and continues to have low mortgage rates and favorable refinancing options. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%. To assist the insurance fund, FHA does have high closing costs (APR) due to the upfront mortgage insurance premium and other FHA fees, but borrowers will find that these can often be added to the loan amount.

For home purchase loans, seller concessions will sometimes cover the bulk of these fees. Despite any negativity, FHA's latest offer is the FHA streamline refinance with no cash out for borrowers who have loans that were endorsed prior to June 1, 2009. Without an appraisal or other documentation, eligible borrowers can refinance quickly to the low FHA mortgage rates being offered at this time. Volume for the FHA streamline has been high enough for lenders to turn away any borrower who is not already a customer. With a larger number of FHA approved lenders available, online inquiries have become a popular way to obtain this FHA refinance.

Jumbo 30 year fixed mortgage rates increased by .125% this past week and are now at 4.250%. Jumbo 15 year fixed mortgage rates are at 3.125% and 5/1 adjustable mortgage rates are at 2.250%. Excellent credit is required in order to receive these low jumbo mortgage rates with 0.7 to 1% origination fee. These loans require full documentation for employment and income for both outside employment or self employed.

Asset statements must show enough available funds for the higher down payment and additional month of reserves that are required. Jumbo mortgages are becoming more competitive as more lenders are entering this market. While these loans are considered risky, they are also profitable for lenders who usually keep them within their portfolio. With more lender product offerings for jumbo mortgages, borrowers may find there is more flexibility when considering an approval. Obtaining lender requirements and mortgage rates in advance will help borrowers find the best deal when shopping for a jumbo loan.

Mortgage rates were at risk of rising most of last week as MBS prices fell after better than expected economic data was reported. MBS prices affect mortgage rates which move in the opposite direction. The preliminary August index for Consumer Sentiment rose to 73.6 which was the highest level since May according to the Thomson Reuters/University of Michigan report. U.S. leading economic indicators rose 0.4% in July according to the Conference Board.

The Consumer Price Index was flat for July while Core CPI, minus food and energy, was up 0.1%. Industrial Production for July increased 0.6% and the August Empire state dropped to -5.9 (the first time below zero since October, 2011). The big news was Retail Sales for July which rose 0.8% which was much better than expected. July PPI rose 0.3% and Core PPI increased 0.4%. Adding to this, data from Europe was better than expected with increased GDP data from Germany and France which sent investors back to risky assets and the stock market higher.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.

Source: Realty Times - Home Builder Confidence Improves as Mortgage Rates Stay Low

Mortgage Rates Continue Record-Breaking Streak

Mortgage Rates Continue Record-Breaking Streak

The 30-year fixed-rate mortgage -- the most popular choice among home buyers -- is now a full percentage point lower than a year ago, Freddie Mac reports in its weekly mortgage market survey. Fixed-rate mortgages have been on a record-breaking streak the last few weeks, pushing home affordability even higher.

"Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at rates for the week ending July 26:

•30-year fixed-rate mortgages: averaged a new low of 3.49 percent, with an average 0.7 point, beating last week’s previous record of 3.53 percent. A year ago, 30-year fixed-rate mortgages averaged 4.55 percent.

•15-year fixed-rate mortgages: averaged a new record low of 2.80 percent, with an average 0.7 point, dropping from last week’s previous record-low of 2.83 percent.Last year at this time, 15-year rates averaged 3.66 percent.

•5-year adjustable-rate mortgages: averaged 2.74 percent, with an average 0.6 point, rising from last week’s record low of 2.69 percent. Last year at this time, 5-year ARMs averaged 3.25 percent.

•1-year ARMs: averaged 2.71 percent, with an average 0.5 point, also rising from last week’s 2.69 percent average. A year ago, 1-year ARMs averaged 2.95 percent.

Source: Freddie Mac

Good news from the Federal Reserve

The Federal Reserve took center stage last week following through with its commitment to become more transparent. The Fed has revealed that it intends to keep rates "extraordinarily low" for a longer period than thought, potentially through 2014. Additionally, the Fed has now officially stated that it will use an inflation target to help control monetary policy. Following the Fed’s announcement, Fed Chair Bernanke revealed that the Fed is considering a QE3, potentially later this year. Mortgage rates had been on the rise, until this statement, which many interpreted as the Fed showing signs that it has significant concerns about the overall state of the economic recovery.

This week is jam packed with economic news and data for markets to digest. We have both ISM Indices due, Consumer Confidence, and the monthly employment data. Should any of these reports reveal signs of economic slowing, mortgage rates are likely to move back toward record lows.  However, a week of positive economic data could nudge rates just slightly higher at the week’s end.

Source: Market Watch Report from Axiom Financial

http://www.debbiecheney.com/

Low Mortgage Rates Keep Housing Affordability High

Great News:

Low Mortgage Rates Keep Housing Affordability High

from REALTOR®Mag  Daily Real Estate News

Friday, December 09, 2011

Mortgage rates continued to be near record lows this week, keeping housing at affordable levels for most households.
 
"Thirty-year fixed-rate loans have declined 0.62 percentage points from a year ago, and median sales prices on existing homes are off 4.7 percent in the year ending with October,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement. “These low rates and home prices have pushed housing affordability to record highs this year.”

Monthly principal and mortgage interest payments accounted for 12.6 percent of a median family incomes in October, Nothaft notes. For the sixth time this year, the National Housing Affordability Index reached another all-time record high, according to the National Association of REALTORS®.

Here’s a closer look at mortgage rates for the week ending Dec. 8.

•30-year fixed-rate mortgages: averaged 3.99 percent, with an average 0.7 point, down from last week’s 4 percent average. A year ago, 30-year rates averaged 4.61 percent.

•15-year fixed-rate mortgages: averaged 3.27 percent, with an average 0.8 point, just slightly above the all-time low of 3.26 percent it reached on Oct. 6. Last year at this time, 15-year rates averaged 3.96 percent.

•5-year adjustable-rate mortgages: averaged 2.93 percent this week, with an average 0.5 point, ticking up slightly from last week’s 2.90 percent average. Last year at this time, the 5-year ARM averaged 3.60 percent.

•1-year ARMs: averaged 2.80 percent this week, with an average 0.6 point, edging up slightly from 2.78 percent last week. A year ago, 1-year ARMs averaged 3.27 percent.


Source: Freddie Mac

http://www.debbiecheney.com/