The NAR or National Association of Realtors just released the September existing home sales data...Although it points to persistent weakness in the Real Estate Market, there is some silver lining to report. Below are the published figures.
RTRS-US SEPT EXISTING HOME SALES 4.53 MLN UNIT ANNUAL RATE(CONS 4.3 MLN) VS AUG 4.12 MLN (PRV 4.13 MLN)
RTRS-US SEPT EXISTING HOME SALEXS +10.0 PCT (CONS +4.0 PCT) VS AUG +7.3 PCT (PREV +7.6 PCT)
RTRS-US SEPT INVENTORY OF HOMES FOR SALE -1.9 PCT TO 4.040 MLN UNITS, 10.7 MONTHS SUPPLY
RTRS-US SEPT NATIONAL MEDIAN PRICE FOR EXISTING HOMES $171,700, -2.4 PCT FROM SEPT 2009
RTRS-US NAR SAYS 35 PCT OF US SEPT EXISTING HOME SALES WERE DISTRESSED SALES VERSUS 34 PCT IN AUG
RTRS-TABLE-U.S. SEPT EXISTING HOME SALES ROSE 10.0 PCT
Rates are still holding steady in the 4-4.25% for the most qualified borrowers. Rates have the chance of falling further, but not until the FED solidifies their stance on quantative easing. This week should give guidance to rate direction. Stay tuned and keep that finger over the "lock" button!
Monday, October 25, 2010
Thursday, October 21, 2010
What to expect for Rates?
If any of you have been following the mortgage market with us, one would realize that this is a very volitile market we are dealing with. With that said, we have seen falling rates as the trend for the last month or so. Why may you ask? In this authors opinion, it would be a combination of a couple things, but most importantly a result of the impending election, the fact the economy is faltering badly, and the possibility of another round of quantitative easing being introduced by the FED.
To be sure, in any election year we see politicians going out of their way to maintain status quo. They certainly don't want anything drastic occuring in the runup weeks to election day to derail any platforms they may be running on. This applies to all facets of the government, sorry to say.
The economy is in the dumps...far be it for this author to state otherwise...Interest rates are at historic lows in the hopes of stimulating borrowing...spending...investing. Labor costs and material costs have been rising, unemployment is approaching 11%. Even with the astronomical amount of money being pumped into the economy, we are still flirting with deflation. The world markets are in the same disrepair and the exit still looks years away.
Enter the FED. At the most recent FOMC meeting, the verbiage specifically left open the option for further intervention by the FED into the markets in the form of quantative easing. For those of you who are unfamiliar with the term, a central bank(FED) first credits it's own accounts with money it creates "ex nihilo"(out of nothing), then goes out and buys financial assets including, but not limited to; government bonds, mortgage backed securities, agency debt, and corporate bonds from financial institutions in what is referred to as open market operations. In other words, the FED cranks up the printing presses and "pumps out the benjamins" to purchase other institutions debt in the hopes that by refilling the coffers of said institutions this will stimulate the economy.(think more loans and monies available for consumers, small business etc...)
Will it work? Who knows what the future is going to hold. What we can assume is that rates will remain very competitive for at least the near future. Currently the best qualified borrowers are commanding 4% on 30 year mortgages for conforming(<417,000) loan amounts. We have seen some lenders in the past week post 3.875% on their rate sheets, but unless you are quite savvy and/or work with a broker who has realtime mortgage feeds, your timing will need to be impeccable. Best of luck grabbing one of these historic low rates before they dissappear!
Caveat....After Nov 3, all bets are off. There will undoubtedly be changes in policy moving forward from that point....as I mentioned earlier, none of the politicians wants to rock the boat right now.
To be sure, in any election year we see politicians going out of their way to maintain status quo. They certainly don't want anything drastic occuring in the runup weeks to election day to derail any platforms they may be running on. This applies to all facets of the government, sorry to say.
The economy is in the dumps...far be it for this author to state otherwise...Interest rates are at historic lows in the hopes of stimulating borrowing...spending...investing. Labor costs and material costs have been rising, unemployment is approaching 11%. Even with the astronomical amount of money being pumped into the economy, we are still flirting with deflation. The world markets are in the same disrepair and the exit still looks years away.
Enter the FED. At the most recent FOMC meeting, the verbiage specifically left open the option for further intervention by the FED into the markets in the form of quantative easing. For those of you who are unfamiliar with the term, a central bank(FED) first credits it's own accounts with money it creates "ex nihilo"(out of nothing), then goes out and buys financial assets including, but not limited to; government bonds, mortgage backed securities, agency debt, and corporate bonds from financial institutions in what is referred to as open market operations. In other words, the FED cranks up the printing presses and "pumps out the benjamins" to purchase other institutions debt in the hopes that by refilling the coffers of said institutions this will stimulate the economy.(think more loans and monies available for consumers, small business etc...)
Will it work? Who knows what the future is going to hold. What we can assume is that rates will remain very competitive for at least the near future. Currently the best qualified borrowers are commanding 4% on 30 year mortgages for conforming(<417,000) loan amounts. We have seen some lenders in the past week post 3.875% on their rate sheets, but unless you are quite savvy and/or work with a broker who has realtime mortgage feeds, your timing will need to be impeccable. Best of luck grabbing one of these historic low rates before they dissappear!
Caveat....After Nov 3, all bets are off. There will undoubtedly be changes in policy moving forward from that point....as I mentioned earlier, none of the politicians wants to rock the boat right now.
Friday, October 8, 2010
Mortgage Rates Fall again!
If you have been paying attention to the market, you don't need us to tell you that we have hit historic lows. In an unprecedented week of falling rates, this author doesn't know what to say anymore. There was a sell off at the closing bell today so we weren't able to pocket all the gains, but that probably was more of a hedge by the investors heading into the long Columbus day weekend than anything else. In summation, the teetering economy has the FED on point with the possibility of quantitative easing at the ready. The employment numbers have seen a sharp decline in the private sector. The Mortgage Backed Securities that support interest rates have seen their prices go through the roof while the yields have fallen. All in all a perfect storm for the lowest rates on record. If you have been sitting on the fence waiting for the rates to bottom out, do not hold off anymore. 30 year fixed conforming loans have par rates at roughly 3.875 for 30 day locks....thats right 3.875%.....Enjoy the weekend, and hopefully we see this continue into the coming week!
Wednesday, October 6, 2010
Market rates update
Another day of gains! Please forgive us as we transition our blog to our new web platform, it has been a work in progress and we will soon enough have it sorted! To cut to the short, we have been enjoying an extended period of exceptionally low rates. Market support for the coupons backing mortgage interest rates have been trading at all time highs in price. This is very good for the market. It not only demonstrates there is an appetite for fixed income products, but also provides support for rates to remain low in the near future. Add to this the Fed's stance on the possibility of injecting more assistance in to the economy in the form of quantitative easing, and we can see why these low rates are available! As of this writing, the 4.5% FNMA coupon is up almost 10 ticks to 104 22/32. Fixed 30 year rates for a well qualified conforming borrower are in the 4.0-4.25% while ARM rates are as low as 2.95%. Stay tuned for a more in depth analysis as the week proceeds!
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