Posts Tagged ‘First Team Stimulus Package’

Mortgage Rates – December 16, 2010

December 18, 2010 Leave a comment
30-Year Fixed Rate Mortgages
Average 4.83 4.83 4.82 4.82 4.84 4.82
Fees & Points 0.7 0.6 0.7 0.6 0.7 0.8

Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI, CT
Southeast: NC, SC, TN, KY, GA, AL, FL, MS, PR, VI
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU

These numbers are averages from mortgage brokers through out the US. 

From Freddie Mac

Dave & David Warner


Weekly Primary Mortgage Rates

December 9, 2010 Leave a comment
December 9, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.61 % 3.96 % 3.60 % 3.27 %
Fees & Points 0.7 0.7 0.6 0.6

From Freddie Mac

Dave & David Warner

Real Estate

Weekly Primary Mortgage Rates

December 2, 2010 Leave a comment
December 2, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.46 % 3.81 % 3.49 % 3.25 %
Fees & Points 0.8 0.7 0.6

From Freddie Mac

Bidding Wars Are Back in Some Markets

December 1, 2010 4 comments


In another sign of a housing-market recovery, bidding wars are back.

Not everywhere. But in some upper-middle-class suburbs around San Francisco and New York, and other areas where prices have hit bottom, first-time buyers eager to take advantage of relatively low prices and low mortgage rates are actually driving up prices, says Tara-Nicholle Nelson, an analyst at Buyers are competing at the low end of the market, too, for homes under $200,000 and foreclosures, as buyers with smaller budgets take a stab at ownership.


But experts say bidding wars play on buyers’ worst fears. When an offer is rejected, it fosters a sense of urgency, so they’ll place more aggressive offers on the next homes they bid on, says Ms. Nelson. In the worst-case scenario, buyer psychology could boost home prices beyond what they’re really worth.

That’s the kind of whirlwind that led to the last bubble, “with the potential for financial disaster for buyers who overspend,” says Jack McCabe, an independent housing analyst.

To avoid a bidding war, here are three things a buyer can do:

Research a neighborhood’s inventory. In a real buyer’s market, houses sit on the market for more than six months before selling. To find out how long is typical in a given neighborhood, compare the number of active listings to those under contract — if there’s a glut of houses on the market, there will be far more of the former than the latter.

Watch the jobs numbers. Areas with strong employment numbers are more likely to see bidding wars, because that’s where more people have the credentials — a down payment, work documentation — to buy a home, says John Mulville, a vice president at Real Estate Economics, which tracks real-estate data.

Don’t go to war over a foreclosure. Bank-owned foreclosures sell for about 36% less than regular listings, according to RealtyTrac, and they account for about 16% of all sales.

But buyers often lose track of their goal with a foreclosure — to buy a home at a big discount — when competing offers kick in, says Mynor Herrera, a Weichert Realtor who specializes in Washington, D.C., and Montgomery County, Md. In general, buying a foreclosed property at 30% above the asking price wipes out any savings from a foreclosure.

—AnnaMaria Andriotis

NAR Survey Finds Half of Homebuyers to be First-Time Purchasers

November 17, 2010 Leave a comment

First-time homebuyers purchased half of all homes that were sold from July 2009 to June 2010, according to an annual survey of buyers and sellers conducted by theNational Association of Realtors (NAR).

That’s up from 47 percent in the previous 12-month period, and the highest share of first-time homebuyers in the history of NAR’s study, which dates back to 1981. The previous cyclical high for first-time buyers was 44 percent in 1991.

The trade group attributed its findings to the success of the federal government’s homebuyer tax credits that began in 2009. Ninety-three percent of first-time buyers during the July 2009-June 2010 period used the first-time buyer tax credit, according to NAR.

Fifty-six percent of entry level buyers financed their purchase with a Federal Housing Administration (FHA) loan, while another 7 percent used the Veterans Affairs(VA) loan program.

Forty-two percent said financing their first home was more difficult than expected and 9 percent had been rejected by a lender.

NAR’s profile shows the median age of first-time buyers was 30 and the median income was $59,900. The typical first-time buyer purchased a 1,540 square foot home costing $152,000. Ninety-five percent chose a fixed-rate mortgage.

First-time buyers who made a down payment used a variety of sources: 74 percent used savings, 27 percent received a gift from a friend or relative, and 9 percent received a loan from someone they knew. Eight percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds.

The lion’s share of buyers – both first-timers and previous homeowners – view their home as a good investment, according to Paul Bishop, NAR’s VP of research.

“Eighty-five percent of recent homebuyers see their home as a good investment, and nearly half think that investment is better than stocks,” he said.

“Even with the turmoil created by the housing boom and bust, this indicates the long-term view of homeownership as a fundamental goal and value remains sound,” Bishop said.

But NAR says it’s concerned that today’s credit policy restrictions are locking responsible borrowers out of a sustainable model for homeownership. The trade group issued an announcement last week urging the mortgage lending industry to reassess and amend their policies so more qualified homebuyers can become homeowners.

Fannie MaeFreddie Mac, and FHA currently account for more than 90 percent of the mortgage market.

NAR says lenders refuse to make loans unless FHA will insure them or the GSEs will buy them. However stricter underwriting rules from the government agencies eliminate many buyers with credit scores as high as 750, and lenders are imposing credit overlays of their own, restricting the availability of credit, according to the trade group.

“Under current practices, many would-be homebuyers who could responsibly, affordably become home owners are unable to do so,” said 2010 NAR President Vicki Cox Golder. “NAR wants to ensure that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream.”

The organization has vowed to increase mortgage lending to qualified borrowers, and as part of that policy, has begun developing educational materials for Realtors and consumers about credit issues, including the importance of good credit, lender credit policies, and how to find a fair and affordable mortgage.

NAR says it also plans to work with FHA, the GSEs, private lenders, and federal regulators to encourage them to assess their credit policies on a regular basis, and will urge them to re-evaluate their policies regarding which homeowners can qualify for loan modifications, short sales, or deeds-in-lieu of foreclosure to help more borrowers keep their homes or rebuild their credit.

By: Carrie Bay

Chinese workers build 15-story hotel in just six days

November 12, 2010 Leave a comment

As the United States and China battle over the finer points of currency manipulation at the G-20 summit, American negotiators may want to take note of this startling testimonial to the productivity of Chinese workers: A construction crew in the south-central Chinese city of Changsha has completed a 15-story hotel in just six days. If nothing else, this remarkable achievement will stoke further complaints from American economic pundits that China’s economy is far more accomplished than ours in tending to such basics as construction.

By Brett Michael Dykes

Interest Rates Today

November 4, 2010 Leave a comment

Current Trend Direction: Sideways to Higher

Risks favor: Carefully Floating into the Fed

Current Price of FNMA 3.5% Bond: $101.06, +31bp

The votes are in, and the Republicans have taken control of the House of Representatives, while the Democrats have retained control of the Senate.  And this could spell a very interesting “lame duck” session over the next few months, and even more interesting term ahead for the new balance of power.  Businesses and consumers alike have been feeling a great deal of uncertainty about legislation – both already passed and pending – and the corresponding impact on the economy.  And the anticipated gridlock that may occur over the next several years doesn’t necessary inspire confidence on either side of the ticket, in terms of what it will mean for Wall Street and Main Street alike.  We also think it’s likely that some of the ousted politicians will attempt to be quite active over the next few months during their “lame duck” session, while the Democrats still retain control over both the House and Senate.

But don’t relax yet, the heavyweight news week is far from over!  It’s Fed Day once again – and the Fed is expected to announce the details on their next round of Quantitative Easing.  While the details will become more clear – the debate over the wisdom of QE2 is likely to continue, with widespread dissention of opinion in the market at large, and even within the Fed chambers.

So what is the market anticipating as far as the announcement?  The Fed doesn’t like “shocking” the market, so in various comments and speeches over recent weeks, Fed members have led the market to believe that they will purchase around $500B in Treasury Securities over the span of six to eight months, but will likely leave the possibility open for tweaking of this purchase plan as needed.  Remember Bernanke’s comment about a golfer trying to learn how to use a new putter?  They’ll definitely want to leave the door open for some flexibility – but it reeks a bit of some uncertainty as well.

If $500B over 6 to 8 months is indeed announced, the Bond market may breathe a sigh of relief for getting what was anticipated, and we could see Bond prices push higher short-term and attempt to test the all-time highs.  Now remember, the Fed does read the paper and watch the news – and most certainly knows that the market is expecting $500B – so it is quite likely the Fed would have made comments to correct that assumption if it was off-base.  It’s kind of like playing that old game as a kid – when you hide something, but help the seeker find it by saying “warmer, warmer, no, now colder….OK, warmer, warmer….hot, hot, HOT!”  The Fed can’t leak the news, but they sure have broadcasted enough hints…and their recent silence indicates to us that they think the market has speculated correctly indeed, and we see Bonds getting a temporary lift on the news.

But longer-term, it is tough to gauge the negative unintended consequences that could come with another round of QE – and let’s not forget about the accumulation of more government debt.  The threat of serious inflation and further devaluation of the US Dollar could prove to be headwinds for long-term rates – including home loan rates – down the road.

So why do QE2?  Advocates of QE2 expect lower interest rates to help areas of the economy that are interest rate sensitive, like refinances, home purchases and business expenditures.  We agree that lower rates can stimulate some activity in these areas – but we also believe that consumer and business demand would be more positively influenced by a boost in confidence, which can only come from a greater degree of certainty in the economy and labor market…something that has been sorely lacking for quite some time.  And it remains to be seen how the brand new political mix will be able to boost confidence.

A big immediate benefit of QE2 could be further devaluation of the US Dollar, which would help boost exports and thereby raise our Gross Domestic Product (GDP).  GDP in the most recent Quarter is running at 2%, and is expected to run near that level for the next couple of Quarters.  This means that unless GDP does get a boost, we will not see any significant decline in the unemployment rate in the near future…as GDP needs to run at 3.5% or better to create a meaningful amount of jobs.

Last but certainly not least – we got a look into the labor market this morning, when the not-always-reliable ADP Report showed 43,000 private jobs created in October, above the 23,000 that was expected.  ADP also revised September’s number of -39,000 to only -2000.  This was a modestly positive report that is somewhat inline with the 60,000 private job creations expected to be reported within the official Jobs Report this Friday…but more on Jobs tomorrow as we lay out our strategy headed into Friday’s release.

We will continue to Float and would like to do so into the Fed announcement, given our expectations.  Once the Statement is released, we will follow the knee-jerk reaction in Bonds, and will Alert you of any significant changes.

Mike Harper
Private Mortgage Banker
Bankers Funding Company, LLC