The News is A Buzz On Mortgage Rates

See the latest CNBC story on Mortgage Rates and Home Prices??

Have I said it is time to get off the fence?   I know I am a Realtor that may only be looking to list and home or get a buyer.  But that isn't why...it is for your benefit!

Listen to this article produced by Matthew J. Belvedere. 

CNBC Mortgage and Housing Discussion

Now you heard from CNBC.....you know that moving, if you need to move to that larger or smaller home, is a smart move NOW!!

Call your Realtor today!

More Buyers Buying!! Now is not the time to wait

In reviewing multiple sites, I have found that Jim's Mortgage Matters really does a good job of summarizing trends.

Note the quick analysis on refinances being down with the new rates(up a point-1% in past 30 days) while purchases are up 2%.
Purchase applications have seen a double digit increase over the past year(16%).

As Jim notes, no one can predict where mortgages will go!!!
Yet, Fed action seems to indicate they will continue to rise...but who knows!  Home prices continue to strengthen also.

So are you willing to risk the chance of the double whammy of higher rates and higher prices???   Again, no guarantee that you will face this situation but the probability is very real.

Keeping you updated on the market! For the week of  July 1, 2013 MARKET RECAP The Power of Expectation Mortgage rates continue to be the lead story in the financial press, and for good reason – rates are up a full-percentage point over the past month and are now at July 2011 levels. It's understandable that the spike in mortgage rates would slow refinance activity. Indeed ,that's been the case: Refinances have dropped considerably over the past month, and the latest weekly data show yet another drop, with activity falling 5%. Refinances are now at a two-year low, and their percentage of overall lending has dropped to 67%. Purchase activity is a different story: Purchases were up, rising 2% from the previous week. Total purchase applications are actually up 16% year over year, indicating homebuyers have yet to be put off by rising mortgage rates. We've written frequently about expectations. If buyers expect lower prices, they'll frequently (but not always) wait for lower prices. We saw a lot of that behavior when mortgage rates were trending lower. Many borrowers, especially on the purchase end, would wait and wait and wait. (Refinancers were more willing to act, knowing if rates continued to drop they could refinance again.) On the other side of the coin, people tend to be spurred into action by rising prices. They don't want to pay more tomorrow for what they can get cheaper today. We've seen that in the purchase market over the past month. Home prices have been rising steadily over the past 18 months, but now mortgage rates are rising too. More borrowers (and most lenders, for that matter) don't expect to see a return to the ultra-low rates of a couple months ago. Many believe the trend has shifted and rising rates are the new norm. We think rising rates are the new norm too. We say that because credit markets are much more sensitive to the Federal Reserve and the prospect of it curtailing its mortgage-backed securities (MBS) purchases. When the Fed curtails (or even hints at curtailing) its purchases, interest rates will rise, which means today's bond investors will suffer losses. (When interest rates rise, the price of fixed-income investments like bonds fall.) Obviously, these investors don't want to suffer losses, so they'll sell if they think demand for bonds and fixed-income securities will fall. Of course, we can't predict with certainty whether mortgage rates will move higher in the near future. After all, a significant macro event – a major terrorist attack, a large bankruptcy, a European bank run – could spur money to flow back into haven investments, like U.S. Treasuries and MBS. That said, we see higher rates and more volatile rates as the likely scenario. For this reason, we continue to say that waiting is the real risk in this market. Economic Indicator Release Date and Time Consensus Estimate Analysis Construction Spending (May) Mon., July 1, 10:00 am, ET 0.8% (Increase) Important. Residential construction spending is driving overall spending growth. Mortgage Applications Wed., July 3, 7:00 am, ET None Important. Rising rates have spurred more buyers into action. International Trade (May) Wed., July 3, 8:30 am, ET $40.2 Billion (Deficit) Moderately Important. The increase in non-energy imports points to an entrenched recovery. Employment Situation (June) Fri., July 5, 8:30 am, ET Unemployment Rate: 7.5% Payrolls:165,000 (Increase) Very Important. Interest rates will rise if payrolls increase more than anticipated. Full Steam Ahead Sales of new and existing home are gaining momentum: More supply is coming to market and prices continue to rise. On the latter, the S&P/Case-Shiller Home Price Index shows prices up 1.7% in its 20-city index month over month; the year-over-year rate is exceptionally strong, at plus 12%. But will rising mortgage rates derail the recovery? We don't think so. Many people have the perception that rising mortgage rates lead to lower (or at least less growth) in home prices. The rationale goes that rising mortgage rates lower affordability, so home prices fall to compensate for higher financing costs. The perception was recently refuted in the New York Times. Douglas Duncan, chief economist at Fannie Mae was quoted to say, “There’s no strong correlation between interest rates and home prices.” Mortgage rates rose sharply in the late 1970s, but home prices continued to rise too. In the 1990s, rates were relatively flat and home prices continued to move higher. In 2007 and 2008, both mortgages rates and home prices fell. In 2013, rates have increased and so, too, have home prices. In other words, there really isn't much of a correlation. To be sure, mortgage rates matter, but they're less important than many people believe. Job and economic growth are by far the more important variables, and both have been improving in recent months. EQUAL HOUSING LENDER

Will FED QE3 push Mortgage Rates?

Hampton Roads has seen month over month improvement since June 2011 in both sales and prices in the lower price strata. No doubt the sliding from an inventory of 14,000 homes to approx. 10,000 homes has pressured home prices as more buyers come out to get the low 3.5% rates.

As you can see below, this trend is being experience broadly across the country and is evident in the numbers and the optimism in home builders.

A comment that must grab your attention is the commentary below on the Fed's $40 billion infusion into the equity markets via mortgage bond purchases.   Influx of funds may actually undergird the current mortgage rates, preventing them from falling farther.

Translated:  Rates are as low as they are going to be!!

So the time to act is NOW!

Keeping you updated on the market! For the week of  September 24, 2012 MARKET RECAP The argument that housing isn't in full-recovery mode continues to weaken. Look no further than the sentiment of those whose living depends on bringing new supply to market – the home builders. Confidence among builders has surged through 2012. A year ago, the builders were deep in the doldrums; their sentiment index was down to a very low 15. Today that index stands at 40. That's a remarkable change in sentiment. Optimism is no longer the exception; it's the rule. The upward trend in housing starts is no doubt a contributing factor to rising optimism. Since August 2011, starts have been on a steady upward trajectory. For August 2012, the trend continued to move higher, with starts advancing 2.3% to 750,000 annualized units. Single-family units paced the gain, improving 4.5%. To be sure, 2.3% advance isn't a spectacular, but slow and steady wins the race. Slow and steady also produces substantial advances over time. A year ago, starts were at 600,000 annualized units. Today, the pace in starts is up 25%. Sales of existing homes are also moving in the right direction, though the pace is a bit more volatile. For August, existing home sales improved 7.8% – posting the largest percentage gain in over a year – to an annual rate of 4.82 million units. The higher sales pace, in turned, tightened inventory to a 6.1-months supply. Existing home sales were helped by a slight drop in prices in some markets, which dropped the national median home sales price 0.2% to $187,400. Looking at the longer-term price trend, the national median home price is still up 9.5% year over year. At this point, the best course of action is to let the market recover on its own. The chart below reveals what can happen when good intentions interfere. The spikes in existing home sales that occurred in November 2009 and May 2010 were a reaction to the impending expiration of the federal home tax credits. After November 2009 and May 2010, sales fell off a cliff. Future demand was simply pulled into the present, thus leaving a future void. Around September 2011, a slow, slightly volatile, uptrend formed. The good news is that the trend that formed in 2011 is genuine and sustainable. The trend in mortgage rates is less genuine, because the Federal Reserve has openly influenced the mortgage lending market. This week, mortgage rates did ease a couple basis points across most product offerings. Such a minor decrease suggests that rates really don't want to go much lower. Activity in the 10-year Treasury note also points to a rate bottom. When the Federal Reserve announced it would continue to buy mortgage-backed securities and Treasury securities last Thursday, the yield on the 10-year Treasury note actually increased (since then it's been moving marginally lower). Given the Fed's strategy to add $40 billion to the base money supply monthly, investor concerns could be shifting toward consumer price inflation and away from slow economic growth. If inflation becomes a front-burner issue, interest rates will be very hard pressed to go lower. Economic Indicator Release Date and Time Consensus Estimate Analysis Mortgage Applications Wed., Sept. 26, 7:00 am, et 380,000 (Annualized) Important. Lower lending rates fail to draw in more purchase activity. New Home Sales (August) Wed., Sept. 26, 10:00 am, et 4.6 Million (Annualized) Important. The upward trend in new home sales and construction are good news for the economic outlook. Gross Domestic Product (2nd Quarter 2012) Thurs., Sept. 27, 8:30 am, et 1.6% (Annualized Growth) Important. The upward revision in growth estimates is primarily due to the housing recovery. Pending Home Sales Index (August) Thurs., Sept. 27, 10:00 am, et 1.0% (Increase) Important. The trend in home sales is expected to improve through the end of the year. We're Only the Messenger Lenders make money lending, not by not lending. This might seem obvious, but lenders are often a lightening rod for frustration. “We can't we get my client qualified?” is a repeated complaint. We all know that we are not returning to the lending environment circa 2005, and that's a good thing. That said, we would like to go to a new lending environment, because the current one is too homogeneous (lacks diversity) and too formulaic. There are simply too many one-size-fits-all rules and regulations in today's lending market. Banks have to adhere to uniform new regulations set forth by the Dodd-Frank Act. They also have to adhere to international rules, known as Basel III, which impart strict capital requirements. More rules and tighter regulations, particularly ones that are uniform across the country, discourage lenders from venturing out past plain vanilla residential mortgages. If any business is forced to address increased regulation, mandated MBS repurchases, and increased litigation, that firm will tend not to venture far out on the risk curve. What we need are rules and regulations that account for risk-based pricing tailored to particular markets. North Dakota and New York are different markets with different borrower profiles. Instead of forcing lenders to adhere to a uniform standard, regulators should permit a variety of standards and pricing policies based on the risk and borrower characteristics of different metropolitan markets. Should that occur, today's clogged lending pipes would certainly flow more freely, allowing more funds to flow to more borrowers.

Mortgage Rate Gamble

Is History About to Repeat Itself???

   One of the greatest gambles today is in Last Vegas or playing the lottery....

   The greatest gamble is waiting out
               lower 
                          Mortgage Rates

 Rates have been in 5% range or below since
               DECEMBER 2008 
       And we were teased when rates dipped below
                  4% for a few moments in the late 2010.

Yet the party may be over!!!

    Rates have ticked up to 4.25-4.5% range in the past couple of weeks with many mortgage watchers seeing the market lean toward higher rates.

   Thinking you should ignore this sentiment as it
is identical to that heard in late 2007 and 2008 when rates were in the 6 % range for the 1st time 
in a couple of years???  Remember what happened in 2008 and since....want to go through that again???

      The basis for the belief that rates will move higher is simple....INFLATION!! 

    Been awhile since we heard that word.  But with
the large National Debt, new "insertion of capital"(i.e. printing more money) by the Fed, any kind of economic growth, INFLATION could be a real possibility.  A bit of INFLATION is good; lots of INFLATION could derail an economy.

With INFLATION comes higher cost of money....higher interest rates.


If you are locked into a low 4-5% mortgage, great!!!  You are protected.

If you and your family really needs a larger, smaller or just a different home, you are gambling if you think rates will go down!! 


Take the sure bet!!! Refinance or buy now!!!


Think differently...express yourself!!!  Love to hear your point of view...we can talk about it!