The Housing Market Update – What to Look for

 

Consumer Sentiment Jumps to Four Year High:

While historically low mortgage rates and attractive home prices are important to make the housing market attractive, it is actually how a consumers feels about the economy and their own situation that drives demand.

U.S. consumer sentiment rose to its highest level in more than four years in May as Americans stayed optimistic about the job market, while higher income households expected to see bigger wage increases, a survey released on Friday showed. The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for 77.8 and an initial May reading of the same.

It was the highest level since October 2007.

Half of all consumers said the economy had improved during the past year, while buying plans for vehicles and household durables also improved. The gauge of buying plans rose to 132 from 126.

It looks like a strong season for housing now that we have strong consumer sentiment and historically low rates and excellent home prices.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) lost -18 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to increase slightly.
The highest rates of the week were on Wednesday and the lowest rates of the week were on Tuesday.
MBS traded in a fairly tight range, supported by continued fears of Greece leaving the EU and over Spain’s banks.
We received more good news in the housing market with both Existing Home Sales and New Home Sales rising and beating market forecasts.
We had luke warm Durable Goods Orders but saw a spike in Consumer Sentiment.
We also saw some very strong demand for our 5 year and 7 year Treasury auctions.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.

Date Time (ET) Economic Release Actual Estimate Prior
29-May 9:00 AM Case-Shiller 20-city Index –2.6% -2.80% -3.50%
29-May 10:00 AM Consumer Confidence -64.9 69 69.2
30-May 7:00 AM MBA Mortgage Index NA 3.80%
30-May 10:00 AM Pending Home Sales -1.00% 4.10%
31-May 7:30 AM Challenger Job Cuts NA 11.20%
31-May 8:15 AM ADP Employment Change 145K 119K
31-May 8:30 AM Initial Claims 370K NA
31-May 8:30 AM Continuing Claims 3265K NA
31-May 8:30 AM GDP – Second Estimate 1.90% 2.20%
31-May 8:30 AM GDP Deflator – Second Estimate 1.50% 1.50%
31-May 9:45 AM Chicago PMI 57.5 56.2
31-May 11:00 AM Crude Inventories NA 0.883M
1-Jun 8:30 AM Nonfarm Payrolls 155K 115K
1-Jun 8:30 AM Nonfarm Private Payrolls 172K 130K
1-Jun 8:30 AM Unemployment Rate 8.10% 8.10%
1-Jun 8:30 AM Hourly Earnings 0.20% 0.00%
1-Jun 8:30 AM Average Workweek 34.5 34.5
1-Jun 8:30 AM Personal Income 0.30% 0.40%
1-Jun 8:30 AM Personal Spending 0.30% 0.30%
1-Jun 8:30 AM PCE Prices – Core 0.20% 0.20%
1-Jun 10:00 AM ISM Index 54 54.8
1-Jun 10:00 AM Construction Spending 0.50% 0.10%
1-Jun 2:00 PM Auto Sales NA 5.0M
1-Jun 2:00 PM Truck Sales NA 6

 

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REFINANCE UPDATE if your home is under water

This morning, FHFA announced their enhancements to the HARP refinancing program. Operational details of the plan are to be released on November 15. Only loans that were purchased or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009 and have a current LTV over 80% are eligible. In addition, the loan must be current, no late payments in the last six months and no more than one late in the last 12 months. There are no restrictions on who may refinance these loans.

Program guidelines include:

–              No limit on LTV, if new loan is a fixed rate loan (current LTV must be above 80%)

 

–              Loans previously refinanced under HARP not allowed

 

–              Certain agency fees will be waived if new loan is a shorter term loan

 

–              Appraisals not required where Agency AVM is available

 

–              Certain originator Reps and Warrants will be  waived

Borrowers can determine if their loan is owned or guaranteed by Fannie or Freddie at http://www.fanniemae.com/loanlookup/ or http://www.freddiemac.com/corporate/

 

 

 

 

 

 

Historic Low Mortgage Rates, again?

How many times have you heard that “Mortgage rates are at historic lows!”?

You’ve heard this line when rates were at 6.0% and 5.50% and 5.0%. You’ve heard it so many times it may not even register anymore. But have you taken the time to speak to a mortgage specialist who can guide you through the process and help you determine the best time to lock in your refinance loan?

There many free resources available online to help homeowners better understand what mortgage interest rate they will qualify for. It is very important to remember that no homeowner will get a 100% accurate rate quote until they submit a mortgage refinance application. One submitting this application of homeowners will better understand if they can save money by refinancing.

How do you take advantage of this opportunity? Contact a lender you trust and a real estate agent with experience and knowledge of your area. Talk to people who have recently purchased or refinanced a home. The tools required for a successful investment in your future are all around you!