Sunday, October 5, 2014

Rates unchanged to Lower...Why are Buyers waiting????

A Home Buyers

October 2014 still finds interest rates below 5%.  Rates haven't been over 5% for months now.  Yet, many buyers seem to be on the sidelines still.

Yes, the real estate market is improving.  Just note the "decrease" is year over year price increases that came down to 6.8% from 8.1% a month earlier.  A crisis!!!   As Jim notes in the update below, the rate of growth is slowest since 2012.  

Is that all bad??  Not at all!!!!  No ones to get back to the hyper growth of the mid 2000s that caused so many short sales and foreclosures as the market "readjusted".

For three years now, the Fall Season is nearly as strong as the Spring Season for home sales, contracts closed and listings coming on to the market.   I have seen listings sell and buyers contract on homes steadily since mid-September and it hasn't slowed down.

So why do I say buyers seem on the sideline?  It is just a matter of numbers.   With 5 years minimum of under performing home sales, this alone would account for pent up of demand for housing inventory.  

Add the huge number of Millennials coming of age to purchase their first condo, townhome or single family home to the normal life change demand that occurs just because we are all human:  job changes, military moves, marriages, kids and pet, divorces, losing a spouse, remarriage, retirement, moving to assisted living, want a ranch, prefer a condo, need that single family house....and on and on.

The result is massive pressure that has to burst eventually.  And when will it burst?  Again given human nature, after the bargain rates and present home values are history, the buyers will be out
in droves!   The unknown will be if sellers are ahead of behind the buyers!!!

Some buyers may think it would take quite the courage to buy today; 

What if house values decrease?               Unlikely.  
What if interest rates go down further?   Totaly Unlikely
What if a better house comes out later?  You have to look to know
                                                                  if it isn't there now.
What if I can not get a loan?                    Gotta ask to find out!
 Loans are hard to get.                              Only if the credit is bad
                                                                   but banks are lending
Unsure of the process                               Why you call a Realtor!
                                                                   We will explain!
Lease isn't up for 6 months                       Starting early is the
                                                                   smartest move a 1st
                                                                   time buyer can make

Frankly, buyers(and sellers) would be wise to make the move they want to make now. 

Waiting for a better tomorrow is 


Provided to you Exclusively by Jim Belote  
For the week of Oct 06, 2014 | Vol. 12, Issue 40
Jim Belote
Jim Belote
Branch Manager, MBA
Union Mortgage Group
Phone: (757) 395-LOAN
Fax: (757) 351-6471
Union Mortgage Group
582 Lynnhaven Parkway, Suite 300
Virginia Beach, VA 23452
In This Issue...
Last Week in Review: There was positive news in the September Jobs Report, but also some worrying details.

Forecast for the Week: The economic calendar may be quiet, but the minutes from the Fed's September meeting could cause volatility when they're released.

View: Has your inbox gotten unruly? These seven tips can help.
Last Week in Review
It's been said that the devil is in the details. That was certainly true for the September Jobs Report. Read on to learn why.
On the surface, the September Jobs Report was a positive sign for the labor sector, as 248,000 new jobs were created, more than the 210,000 expected. In addition, there were upward revisions to both July and August, adding 69,000 jobs to what had been previously reported. And the unemployment rate decreased to an astonishing 5.9 percent, handily beneath the 6.1 percent expected and the lowest level in six years.

However, digging further into the report, Hourly Earnings came in unchanged. This means that wages aren't growing—and without meaningful wage growth, it will be hard for our economy to improve any faster. Plus, the Labor Force Participation Rate (LFPR) fell to 62.7 percent, reaching its lowest level since 1978. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery. Overall, while this was a positive report, there is still some notable slack in the labor markets.

In housing news, the S&P/Case Shiller Index of property values showed that home prices increased by 6.7 percent for the year ending in July. This was below expectations and the slowest pace since late 2012, as home price appreciation continues to come back down to more normal levels.

And there's an important headline to watch as we head further into the fall. The Fed's big Bond buying program, which has helped keep home loan rates low in recent years, will be coming to an end later this month. But the Fed has vowed to keep home loan rates at low levels for some time through another existing program. This will be a key story to monitor in the coming months.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.
Forecast for the Week
Just one economic report is ahead this week. Plus, the minutes from the Fed's September meeting will be closely watched.
  • Look for the Federal Open Market Committee September Meeting Minutes on Wednesday. With little economic data being released this week, investors will closely dissect the minutes for any hints as to where interest rates are headed.
  • As usual on ThursdayWeekly Initial Jobless Claims will be released. They continue to hover near pre-recession lows.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.

To go one step further—a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, the markets have been volatile but home loan rates remain near their best levels in the last year. I'll continue to monitor them closely.
Chart: Fannie Mae 4.0% Mortgage Bond (Friday Oct 03, 2014)
Japanese Candlestick Chart

The Mortgage Market Guide View...
7 Tips to Tame an Unruly Inbox

Email is a fast, effective form of communication, but sometimes the volume of messages in our inboxes can be overwhelming. Here are seven tips that can help:

Create specific, descriptive subject lines. Clear subject lines serve a purpose. They allow people to quickly skim emails and identify a message. For example, the subject line "Monday's Meeting" can be improved to "Agenda for 10/13 Sales Meeting."

Define action protocols for subject lines. Help readers understand the action required after receiving a message. Define key terms, and begin subject lines with them: "FYI third quarter sales up," "APPROVE Customer Appreciation budget," or "REVIEW first draft of annual report."

Manage your inbox immediately. Fifty percent of email can be deleted once read, so read and delete. Respond immediately to easy-to-answer messages. If an email requires future action, create a task and remove it from your inbox. If you receive information for an appointment, paste the contents in your calendar. Finally, flag messages that require follow up and make sure you get to them.

Declutter. Unsubscribe to newsletters, social media notifications and promotional emails that do not add value.

Pick up the phone. A quick call can replace a long email thread. Plus, it strengthens relationships with that voice-to-voice connection.

Clear it out. At the end of each week, schedule 20 minutes to go through your inbox and clear it out. Sort your inbox by "From" and locate chunks of emails to delete (like social media notifications or sales promotions from a store).

Set boundaries. In today's hyper connected world, email might seem daunting because we don't allow ourselves to be removed from it. Don't check emails before going to bed. Or, set an email-free time for each day.

As always, please feel free to pass these tips along to your team, colleagues and clients—and begin your subject line with FYI!


Economic Calendar for the Week of October 06 - October 10
Economic Report
Wed. October 08
FOMC Minutes

Thu. October 09
Jobless Claims (Initial)


The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

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Jim Belote
Union Mortgage Group
582 Lynnhaven Parkway, Suite 300
Virginia Beach, VA 23452
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