Home Interest Rates Going Up but will it matter?

Here we go!!!

Another "firm" statement that interest rates are going up.  Should you worry about that, don't!!

As you read, you will note that the rates being up or down really isn't matter.   Jim notes out the expectation is the refinancing and new purchase money will continue strong due to the strengthing economy.

It is called pent up demand be released by greater confidence in one's employement(getting a new job will do that for all the people finding employment).  A second factor is home owner's having the confidence in the real estate market and improved values to make the move that they have held off for 3-5 years.

With more homes, more buyers will be satisfied.  And of course, some of those new active buyers will have a home to sell, helping both inventoiries and the market.   Add the investors with rentals to unload!! 

The market will only continue to improve.

Keeping you updated on the market! For the week of  January 27, 2014 MARKET RECAP Defying Consensus Estimates We, along with most everyone else , believe interest rates will rise in 2014. If you were to ask most mortgage bankers where the rate on the 30-year fixed-rate loan will be on Dec. 31, 2014, you'll likely get a response of 5% or above. To be sure, the year is still young, but mortgage rates have defied the majority opinion by trending down, not up. This past week, rates were either steady or slightly down across the board. Bankrate.com's weekly survey shows an average rate of 4.56% on the 30-year loan. Freddie Mac's survey shows the 30-year loan averaging 4.39%, two basis points lower than last week. Depending on your local market, the rate on the 30-year loan has dropped from 10-to-15 basis points in this new year. Rates have dropped despite the Federal Reserve announcing it was reducing its purchases of mortgage-backed securities. We're not terribly surprised mortgage rates have been falling. At the beginning of the year, the 10-year U.S. Treasury note was yielding above 3%. As we write, the yield is below 2.8%. (To get a rough idea of where the 30-year fixed-rate mortgage is headed, follow the yield on the 10-year Treasury note, which you can readily find at most financial portals .) The upside of lower mortgage rates has been an uptick in both refinance and purchase application activity. The Mortgage Bankers Association 's latest survey shows refinance applications were up 10% last week, while purchase applications were up 2%. The downside is that lower rates have come tethered to lower job growth. We mentioned last week that we were sorely disappointed in the December payroll numbers. Job growth for the month was far below expectations. Later next week, we'll get an idea if December's employment numbers were simply an anomaly that's unrelated to the economy. Preliminary data point to gross domestic product (GDP) growing 3% on an annualized rate for the fourth quarter of 2013. Let's hope that growth is moving ahead at least that much. If growth meets or beats exceptions, December's weak job numbers will likely have been a one-off aberration, and not the start of a new trend. The Federal Reserve will also influence interest rates this coming week. Fed officials are scheduled to convene on Tuesday. On Wednesday, we'll be privy to what they discussed. Most likely, we'll hear that the Fed still supports holding interest rates low into the distant future. But for the immediate future, rates could still rise or fall depending on the Fed's outlook on the economy. The bottom line is that we expect to see some volatility in mortgage rates over the coming week, with most of it occurring on Wednesday and Thursday. Economic Indicator Release Date and Time Consensus Estimate Analysis New Home Sales (December) Mon., Jan. 27,10:00 am, ET 469,000 Units (Annualized) Important. Sales continue to move higher, but the pace of gain is slowing. S&P/Case-Shiller Home Price Index (November) Tues., Jan. 28, 9:00 am, ET 0.4% (Increase) Important. The index will likely show slower price appreciation through the end of the 2013. Mortgage Applications Wed., Jan. 29, 7:00 am, ET None Important. Falling rates have lifted purchase demand, but week-to-week demand remains volatile. Federal Reserve FOMC Meeting Announcement Wed., Jan. 29, 2:00 pm, ET None Very Important. Any changes to economic outlook, quantitative easing, or interest-rate policy will move mortgage rates Gross Domestic Product (4th Quarter 2013) Thurs., Jan. 30, 8:30 am, ET 3.0% (Annualized Growth) Important. Initial indicators point to sustained economic growth into early 2014. Not Quite Where We'd Like to Be For the past year (if not longer), we've been preaching that economic growth, not interest rates will drive housing. To be sure, it was encouraging to see purchase-application activity pick up on lower rates. Unfortunately, cash is still king. The NAR'slatest sales data show cash buyers comprised 32% of existing home sales in December. Therefore, a 2% uptick in purchase applications isn't as meaningful as it would have been a decade ago. Whether mortgage rates are lower or higher, they don't appear to have much impact on home sales these days. Sales of existing homes bounced back in December from a very weak November, but not by much. Sales for the month came in at 4.87 million units, which is about where they were 18 months ago. Unfortunately, sales remain significantly below where they were this past summer. Interestingly, during that time, mortgages rates were rising as monthly sales were rising. Source: Econoday For this coming week we'd like to see the Federal Reserve's data show stronger economic growth. In addition, we'd like to see that data supported by strong fourth-quarter-2013 GDP growth. If strong economic growth is supported with strong job growth, a 5% rate on the 30-year loan will still be an affordable rate in the grand scheme of things.

Credit Ready???

          Being Credit Ready is key when looking to purchase a home.   But did you know that it will keep insurance costs and loan costs low through out the time you own your home??

As you can see in Larry's letter below, there are key elements that impact your credit score.  And there are actions not to be taken without considerable thought so that you don't adversely affect your credit score.

As you look over the pie chart, two categories stick out like a sore thumb:  Payment History and Amounted Owed.

At 35% and 30% of your credit score respectively, you can see regular, on-time bill payment over time and a low debt level will provide a big part of a positive score.  Just as the opposite behavior(missed payment and high debt) will drag the a credit score into the gutter.

Really pay attention to these two and you can really improve your credit.

YET DON'T IGNORE AND OF THE OTHER THREE!!!

A 10% or 15% swing can take a great 700 credit score to mediocre to poor 630/595 scores by not paying any attention to the other details of your credit score.

If your credit needs improving, start with improving on time payments and reducing your debt!!  Be ready for that

next purchase!!!  Or to lower your insurance costs!!

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Market UPDATE!! POSITIVE NEWS AGAIN!!

Thanks to Brian Hill, Prospect Mortgage, for the this Economic Update!!!

As with all the latest housing news, the market is really responding.  Inventories are lower than in the past year, rates are 4% and sellers are ready to sell.

Don't be dissuaded by the Consumer Confidence.....as I have read many economic sources, I am convinced that this measure is an emotional response to the latest news the day the survey is taken.

Keep the faith....it is time to buy while rates are great and before inventories get sparse(?) and before interest rates increase and inventories continue to decrease(a recipe for higher housing costs!).

Are you looking to buy?  Or will you stay on the sidelines??  Register your thoughts today...lets see
the temp of the buyers!!

Brian Hill Branch Manager Prospect Mortgage 4456 Corporation Lane Ste 206 Virginia Beach, VA 23462 Office: (757) 498-0440 4413 Cell: (757) 472-9263 Fax: (877) 612-8073 brian.hill@prospectmtg.com NMLS# 180806 • Learn about home loans • Use loan calculators • Apply for a home loan Referral Request:  Please forward my contact information to anyone you know with a need for real estate financing!		Last Week in the News New home sales rose 5.7% in September to a seasonally adjusted annual rate of 313,000 units from a revised rate of 296,000 units in August. Compared to a year ago, new home sales were down 0.9%. The Standard & Poor's/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 0.2% in August after a 0.9% increase in July. On a year-over-year basis, prices fell 3.8% compared with August 2010. The consumer confidence index fell to 39.8 in October from 46.4 in September. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence. The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 21 rose 4.9%. Refinancing applications increased 4.4%. Purchase volume rose 6.4%. Orders for durable goods — items expected to last three or more years — fell 0.8% in September after a 0.1% decrease in August. Excluding volatile transportation-related goods, orders posted a monthly increase of 1.7%. The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2.5% in the third quarter of 2011. Pending home sales, a forward-looking indicator based on signed contracts, fell 4.6% in September after a 1.2% decrease in August. On a year-over-year basis, pending sales are up 6.4%. Initial claims for unemployment benefits fell by 2,000 to 402,000 for the week ending October 22. Continuing claims for the week ending October 15 fell by 96,000 to 3.645 million, the lowest level since September 2008. Upcoming on the economic calendar are reports on construction spending on November 1 and factory orders on November 3. Click here to visit my website and apply on line: http://www.myprospectmortgage.com/BHill
	1011-1144
Loan inquiries and applications in states where I am not licensed will be referred to a Loan Officer who is licensed in the property state. Equal Housing Lender. Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC (Unique Identifier #3296) is a Delaware limited liability company licensed by the Department of Corporations under the California Residential Mortgage Lending Act and operates with the following licenses: AK Mortgage Lender/Broker License #AK3296; AZ Mortgage Banker License #BK0903027; To check the license status of your CO mortgage broker, visit www.dora.state.co.us/real-estate/index.htm; GA Residential Mortgage License #16984; IL Residential Mortgage Licensee #6424; MA Mortgage Lender/Broker License #MC3296; MS Licensed Mortgage Co.; MT Residential Mortgage Lender Licensee #120; NV Division of Mortgage Lending Mortgage Banker #1173 and Mortgage Broker #3095; Licensed by the NH Banking Dept.; Licensed Banker-NJ Dept. of Banking and Insurance #9932414; Operates as Prospect Lending, LLC in NY (Licensed Mortgage Banker - New York State Department of Banking); Operates as Prospect Mortgage, LLC of Delaware in OH (Ohio Mortgage Broker Act, Lic # MB.803629.000); OR Mortgage Lender Licensee #ML-2006; PA Dept. of Banking license #22122; RI Licensed Lender #20021343LL, Broker #20041643LB; licensed by the VA State Corp. Commission as MC-2195. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. This is not an offer to enter into a rate lock agreement under MN law, or any other applicable law. Your e-mail address has come to Prospect Mortgage via one of the following ways: your approved Prospect Mortgage customer status, business card from a trade show, Internet inquiry, phone inquiry or referral from a colleague or customer. If you do not wish to receive additional information from Prospect Mortgage, please click here to unsubscribe. You will immediately be removed from receiving future messages and do not need to mark this message as Junk or Spam with your email provider.

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Another Voice: Don't Miss This Opportunity

Yesterday, I posted on the significant advantages of this Real Estate Market!


And Today I get an email from Jennifer Keenan of Old Point Mortgage on the Same.


Be sure to click on the link with charts and graphs...


AND NOTE HER FIRST SENTENCE...ENDS
  "send to your buyers".


I think everyone...even sellers need to review her notes.

Historic Data for Home Appreciation 09/30/11

I thought I would provide today, a piece that you can use to send to your buyers.  The housing market still faces many challenges. High unemployment, foreclosures and other distress sales are keeping negative pressure on prices. This of course is good news if you are looking to buy as low rates and lower prices have brought affordability to record levels.   How Affordable? Since 1963, it has cost an average of approximately 43% of 'per capita' or individual income to finance the cost of a median priced home (20% down payment and prevailing 30 year fixed rate mortgage). Right now, it's only about half of that cost at approximately 22%.    Are you holding off on a purchase for fear that prices might fall further? Chances are that some sellers might be thinking the same thing. If you're smart about it, you can use that as an advantage to strike the best possible deal on a home today for once a seller believes that prices have bottomed or are going back up, your advantage will be gone.   Don't confuse Price with Payments - Gambling on the expectation of a lower price tomorrow at the risk of higher rates can cost much more in the long run than locking in a sure thing today. Ex. $200,000 30 Yr. fixed loan @ 4.625% = $1028/mo. today vs. $180,000 @ 6.5% = $1137/mo. later. In other words, paying less can still cost you more.   Own, Rent, or Borrow - One way or another, a home is something we all need every day. The numbers here tell the story and it's no secret that values have fallen, yet over time, that's not the case. As you can see by the chart, values over the last 10 years in most states show very healthy appreciation, and over the long haul (map below) all states have.   We don't get a history lesson in the news because the news is about the moment and the more dramatic the better. That's what sells advertising and that's how they get paid. For the rest of us, taking a rational, longer term view of things makes more sense. This is particularly true when it comes to a home, for this is something we are likely to own for many years rather than just moments.  I have attached this letter along with chart and graphics.  (Click on the sentence).      UP AND RUNNING...www.jenniferkeenan.net!!!!! I look forward to working with you and your clients, if you have any questions, please feel free to contact me.  Never banker's hours!  I'm here even on weekends and evenings! 200 Golden Oak Ct., Suite 100   Virginia Beach, VA  23452 Direct:  757.605.4641 Mobile:  757.272.4199 Facsimile:  757.605.4666 NMLS #101837  MLO #5315VA Email:  jkeenan@oldpointmortgage.com www.jenniferkeenan.net

Thoughts????  Questions???


Don't be left holding the bag when prices and rates increase!!

Not Out there YET???

Knock knock 


Who's there


Anybody


Any body???


Anybody fool enough not to buy when Everybody should will miss out which they didn't buy when Nobody should.

Yes!!!  It is the time that Everybody and Anybody that needs a new home or seeks to invest in real estate should be calling their Realtor!!!!


All Markets are different.  The Markets through out this country are different with some improving much better than others due to various factors such as jobs, decreasing or increasing number of foreclosures, ect.


Yet, without doubt, we have never seen rates this low when housing prices are at the lowest(though climbing) in over a decade in many parts of the country.
Typically rates and home prices contradict one another.


       High Interest Rates        Low Home Prices


     Low Interest Rates         Climbing Home Prices


Today's Magical Formula:


     Low Interest Rates         Low Home Prices


At 4%,  a moderate $250,000 30 year home mortgage has a principle and interest payment of under $1200.


At 6%, this mortgage balloons to almost $1500.


If prices increase so the home mortgage increase to $270,000 and rates are 6%, the mortgage for this same home would be over $1600.




        Do you have $400 per month to "burn"
             over the next 30 years?


Failure to act today could very well cause you to do exactly that.....or worse.




               

Moving Forward...Always Forward

Moving Forward...Don't Look Back (edit/delete)

More often than not, we all love to play "Monday Morning Quarterback".  We love to rehash the plays that failed and those that were are highest moments of success.

And the Real Estate Market faces the same dilemna day in and day out.  When the market was crazy in 2004/2005, buyers and sellers saw the quick sales pace so differently.  The buyers moaned about the home they bought was there third or eighth offer and they finally got a house, wondering in the coming months if it was a good purchase or just bought because "it was the only one we could land".

The sellers estatic at their good fortune of a quick sale at a price they never thought they would get soon feel like they fumbled the ball.  Their old neighbor only three months time sells his home for $10,000 more!  "Oh, did we sell too quickly??  Did we leave money on the table?"  the seller might have wondered as he rehashed the events.

Neither party frequently retained the joy of the transaction by second guessing the result.  Not much is to be gained by this action but it continues.

Though interest rates are as low as they have been in 50 years, inventories lower than 2010 and market conditions in many areas of the country have improved, "Monday Morning Quarterbacks" abound.  Who hasn't heard some one moan about the impact of short sales and foreclosures on home values while buyers snap up these bargain(with the challenges involved) thus reducing the possible glut of depressed values!!!

Or the home owner with $50,000 equity wondering if just would have sold two years earlier when prices were "stronger" that doesn't realize he would have paid more for the house he purchased at that time.

Rather than looking in the rear view mirror, march ahead!!!   Realize in Real Estate as in life, the present reality is the "reality" we live in.  There is no such thing as the "New" Reality....it just  is.

If you are ready to move forward, knowing that is the only way to go, you are ready to take advantage of this market's current reality...the only one there is!!!

Bryan Cerny, Associate Broker, GRI, ABR, SRES, SFR
Rose &Womble Realty, Chesapeake, VA
Licensed in VA & NC

 

On the Hunt: INVESTORS

Have you heard??

            Investors are snapping up foreclosures and short-sale homes in record numbers in the past 30 - 60 days.  Though experiencing the uptick in investor interest in these properties personally, the numerous reports from CNN, NAR(National Assoc. of Realtors) and Rismedia among others regarding this developing phenonomen is wonderful to see.   Like the buds on trees in March, the investors interest in homes is a good indication of the future.

Real Estate investors have been on the sidelines for over two years as financing and their own financial dilemmas hampered their taking advantage of the price-sensitive market.  But with the improving financial markets, REITS and individual investors are finding the funds to begin diving into the market.

Yet, more imperative, they have the CONFIDENCE to make the dive.  This confidence is more important than the finances as it is the fuel behind the willingness to spend the money. And spending they are in both Commercial and Residential Real Estate.

Thus, if you are a home owner wondering if the time is right to move

                               or

                 an apartment dweller wondering if the prices have bottomed so you can delve into buying a home

                                  or

                       an investor wondering if it is time to diversify into rental inventory or like

YOU HAVE TO ASK YOURSELF, 

"SELF, IF THE PROFESSIONAL INVESTORS ARE JUMPING INTO THE POOL, WHY AM I STILL STANDING ON THE SIDE OF THE POOL WATCHING THEM HAVE ALL THE FUN?

Just think if you dive into the pool with all the investors and non-investors alike, you may be part of the solution.   Every time a home sells the real estate market improves.  

              So if you can be part of the solution and make out like a bandit financially, what in the world are you waiting for??

If you need to know how to make it happen, call me at (757) 580-6546 or email at bcerny@roseandwomble.com.