Fixed-Rate Mortgages Lowest on Record

MCLEAN, Va., -- Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), coming on the heels of the Federal Reserve's recent announcements. The conventional 30-year fixed averaged an all-time record low at 4.01 percent; likewise the 15-year fixed averaged an all-time record low at 3.28 percent for the week. Of the five regions surveyed in Freddie Mac's survey, the West region recorded the lowest average rate for the 30-year fixed dipping below 4.00 percent to 3.95 percent.

30-year fixed-rate mortgage (FRM) averaged 4.01 percent with an average 0.7 point for the week ending September 29, 2011, down from last week when it averaged 4.09 percent. Last year at this time, the 30-year FRM averaged 4.32 percent.

15-year FRM this week averaged 3.28 percent with an average 0.7 point, down from last week when it averaged 3.29 percent. A year ago at this time, the 15-year FRM averaged 3.75 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.02 percent this week, with an average 0.6 point, matching last week when it also averaged 3.02 percent. A year ago, the 5-year ARM averaged 3.52 percent.

1-year Treasury-indexed ARM averaged 2.83 percent this week with an average 0.6 point, up from last week when it averaged 2.82 percent. At this time last year, the 1-year ARM averaged 3.48 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Fixed mortgage rates fell to all-time record lows this week following the Federal Reserve's announcement of its Maturity Extension Program and additional purchases of mortgage-backed securities. Interest rates for ARMs, however, were nearly unchanged as the Federal Reserve plans to sell $400 billion in short-term Treasury securities, which serve as benchmarks for many ARMs."

"Meanwhile, the spring and summer home-buying season gave a boost to a number of house price indexes. The Federal Housing Finance Agency reported that its National index (not seasonally adjusted) rose for the fourth consecutive month in July. Similarly, the S&P/Case-Shiller® 20-City composite index, which has a broader scope of properties, rose 0.9 percent between June and July with 17 of the cities experiencing positive monthly growth. Finally, CoreLogic® reported that its index, excluding distressed sales, increased at a 1.7 percent monthly rate for the same month."

Published by Realty Times
September 30, 2011

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Mortgage Rates Continue to be Stable at Record Lows

Mortgage rates this week continued to be stable at record lows which is the result of the slow economic recovery that has become somewhat worrisome to investors. On the bright side, this give consumers more time to get in and take advantage of low mortgage rates and low home prices, a double opportunity that does not happen often. Freerateupdate.com's survey of wholesale and direct lenders show that this past week low mortgage rates remained flat as news from around the globe continues to influence markets.

Current 30 year fixed mortgage rates are at 3.875% and 15 year fixed mortgage rates are at 3.250%. 5/1 adjustable mortgage rates are at 2.625%. For borrowers who want a steady mortgage payment for the life of the loan, conforming fixed mortgage rates have never been so low. Those who fully understand adjustable mortgages can get in below 3% for a period of time and really save some money. These low mortgage rates are available with 0.7 to 1% origination fee to borrowers who have maintained good credit and can meet lender guidelines for approval.

FHA mortgages have continued to be on the rise as consumers look at the benefits that they offer. When credit is not the best, FHA is the way to go for borrowers since they have easier credit qualifying which does not affect low FHA mortgage rates. Also stable this week, FHA 30 year fixed mortgage rates are at 3.750% and FHA 15 year fixed mortgage rates are at 3.500%. FHA 5/1 adjustable mortgage rates are at 2.750%. Even though slightly higher than conforming mortgage rates, FHA allows borrowers to use approved gifts towards the mortgage. In addition, housing grants and bonds can also be used in the transaction. For these reasons, many borrowers are not concerned with FHA closing costs (APR) which tend to be higher because of the upfront mortgage insurance premium and other FHA fees.

For those in need of jumbo mortgage loans, jumbo mortgage rates remain stable and have never been better. Jumbo 30 year fixed mortgage rates are at 4.500%, jumbo 15 year fixed mortgage rates are at 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. Borrowers need to have excellent credit to obtain these lowest jumbo mortgage rates with 0.7 to 1% origination point since these loans are not government insured. Banks often keep jumbo mortgage loans in their portfolio and, therefore, have stricter guidelines when approving them.

European banks continued to make headlines in the news this week as everyone waits to see what will happen with Greece. MBS prices (mortgage backed securities), which can be affected by headlines, also influence the direction of mortgage rates which move in the opposite direction. Economic data showed that retail sales and wholesale prices were flat in August and jobless claims increased for the week ending September 9th. For the good news, consumer sentiment and mortgage applications increased. Home builder outlook is poor this month which is just more evidence that the housing market continues to be sluggish. More consumers who are staying put turned to remodeling in July instead of purchasing. Depending on investor reactions to news this week, if MBS markets rally, there is the possibility that mortgage rates may hit new lows.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

Published by Realty Times
Written by Ed Ferrara
September 21, 2011

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Real Estate Outlook: Jobs Key to Recovery

Jobs are more than a pressing concern in today's economy. Their rebound is inextricably linked to a housing recovery. Even President Obama's proposed jobs legislation includes $15 billions dollars allotted towards the purchase and refurbishment of vacant and foreclosed homes. These homes will then be sold at no profit, or at the price it cost to acquire and fix up.

The Bureau of Labor Statistics shows that while the economy is adding jobs, it's at a rate too slow for a true recovery. The hiring rate in July was at its lowest level since last Fall. The unemployment rate remains near 9.1 percent, though many areas are experiencing much harsher trends.

Fewer jobs means less construction. The U.S. Commerce Department reports that nationwide housing starts declined a full 5.0 percent in August. While the majority of the declines were seen on the multi-family housing side of the equation, it shows builders are holding off for the time being.

The numbers were "consistent with NAHB's forecast for the quarter, and are in keeping with the anemic economic and job growth we are seeing across most of the country," said NAHB Senior Economist Robert Denk. "That said, we continue to anticipate modest gains in new-home production through the end of this year with greater momentum building into 2013, and some pockets of improvement are already evident in about a dozen metros nationwide."

Builder confidence dipped, according to the NAHB, in September, but has held relatively steady for the past 6 months. Unfortunately, it has held steady at a depressed rate.

"The fact that the HMI continues to hover within such a narrow, low range reflects builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," added NAHB Chief Economist David Crowe. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market."

Builders face some steep challenges and are especially concerned in the West, which posted a 3 point decline in confidence in September. The Midwest was the only region seeing sunnier builder confidence. "Very little has changed in terms of housing market conditions so far this year," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada. "Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the S&P downgrade and congressional gridlock on the budget deficit."

The good news is that existing-home sales were up in all regions for the month of August, according to the National Association of REALTORS®. Nationwide existing-home sales rose 7.7 percent. This was despite Hurricane Irene interrupting normal business transactions.

Lawrence Yun, NAR chief economist, said there are some positive market fundamentals. “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” he said. “Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation.”

Regionally, the biggest increase was seen in the West, up 18.3 percent for the month and 20.6 percent higher than August 2010. The Midwest rose 3.8 percent. The South was up 5.4 percent and the Northeast posted a 2.7 percent gain and is 10.0 percent above August 2010.

Prices continue their downward trend, with median home prices down in all regions compared to August 2010. The West saw the largest decline, falling 13.0 percent from a year ago.

Published on Realty Times
Written by Carla Hill
September 26, 2011

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Considerations for Today's First-Time Buyers

First-time buyers are naturally very nervous about entering the market. This was true during sky-high interest rates in the 1980s. It was true when the real estate market was booming in 2005. It is still true today.

Newbies to the market worry about the cost of buying, the process itself, and of course what it will mean for them to be a homeowner. Owning a home is typically the biggest financial responsibility a person will undertake. It starts with the cost of a downpayment and closing costs and continues with a monthly mortgage payment and annual maintenance and repairs.

Today's market, however, brings new worries to the table. The economy is on the brink of a renewed recession. Fewer buyers can qualify for a home mortgage, especially since many lenders want at least 20 percent down. Plus, unemployment rates have remained consistently above 9 percent.

What do first-time buyers really need to know about today's market? Here are some things to consider.

Interest rates are at historic lows, with 30-year fixed rates between 4 and 5 percent! This is incredible. Imagine the difference between an interest rate of 4 percent and one at 13 percent. For a $100,000 with 20 percent down, you'll find a payment near $568 a month. For the exact same home at 13 percent you'll see a monthly payment of just over $1,000.

Home prices fell after the bubble burst, leaving affordability rates at generational highs. This means there are great deals to be had. In addition, there are a large number of foreclosure and short sale properties available, sometimes at even more savings.

This means prices are low and interest rates keep them that way. You will still need a downpayment, however. This is now expected to be at least 20 percent of the total cost of the home.

It's not all silver linings, though. Home values are still falling. It is of paramount importance that if you're in the market to buy, you must research your own local market trends. Are home values plummeting? Are they holding steady? Many times the housing market is directly linked to the health of the jobs market. What is the state of employment in your community?

There are reasons to buy other than just making a sound financial investment. If you plan on remaining in your home for many years to come, then now is a good time to buy regardless of pricing fluctuations. The social benefits still remain strong and your home will be an investment over the long-term.

Be sure to think long and hard about the true cost of homeownership and if it's right for you. This is not a time to get into a financial situation you can't handle. Is your job steady? Do you have an emergency fund in addition to your downpayment amount?

Hiring a knowledgeable real estate professional can be an excellent first step on your way to finding the right home for you. They can help answer all of your questions about the process. There's no reason to go into this process blindly. Let them guide you.

Buying a house is a big decision, but don't let scary headlines deter you. There are great deals to be had in today's market.


Written by Carla Hill, Published on Realty Times
September 21, 2011

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Fixed-Rate Mortgages Continue To Find New Record Lows

MCLEAN, Va., -- Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed-rate mortgages remaining near their 60-year lows as ongoing investor concerns over the European debt market kept Treasury bond yields low. The 30-year fixed averaged 4.09 percent, a new all-time low. The 15-year fixed, a popular refinancing option, also reached a new record low for the week averaging 3.30 percent.

30-year fixed-rate mortgage (FRM) averaged 4.09 percent with an average 0.7 point for the week ending September 15, 2011, down from last week when it averaged 4.12 percent. Last year at this time, the 30-year FRM averaged 4.37 percent.

15-year FRM this week averaged 3.30 percent with an average 0.6 point, down from last week when it averaged 3.33 percent. A year ago at this time, the 15-year FRM averaged 3.82 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.99 percent this week, with an average 0.6 point, up from last week when it averaged 2.96 percent. A year ago, the 5-year ARM averaged 3.55 percent.

1-year Treasury-indexed ARM averaged 2.81 percent this week with an average 0.6 point, down from last week when it averaged 2.84 percent. At this time last year, the 1-year ARM averaged 3.40 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Continued investor concerns over the state of the European debt markets kept U.S. Treasury bond yields low and allowed mortgage rates to ease once more this week. In comparison, the average interest rate of mortgages outstanding in the second quarter was 5.28 percent. By refinancing into today's 30-year fixed mortgage, homeowners could shave almost $1,715 a year in interest payments on a $200,000 loan."

"Apart from just fixed-rate mortgages, various other interest rates are at or near all-time historical lows as well. Both the 10-year constant-maturity Treasury bond and AAA-rated seasoned corporate bond yields were at 50-year lows over the week ending September 9th. In addition, the 1-year constant-maturity bill, a popular index for ARMs, hit its nadir over the week of September 2nd since data began in 1952."


September 16, 2011 Published on Realty Times

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Ready to Move Up?

Today's market has created an environment where it is a great time to be a buyer. Interest rates are still at historical lows, the job market is improving, and affordability is near generational highs.

Those with growing families and steady jobs may be asking themselves if now is the time to "move up". To answer this question, consider these points:

1. Finances: Is your job steady and secure? Moving up can mean taking on the responsibility of a bigger monthly mortgage payment, along with higher property taxes. And any buying process will involve fees and costs that add up quickly. If you have steady income and at least eight months of emergency fund saved up, then now could be a great time to move on up.

2. Equity: Some buyers use the equity they have built in their current house to help fund their "move up." Now is a good time to research the local housing market. Trends are incredibly localized when it comes to housing. Some neighborhoods may have experienced dramatic declines in home values, while others have maintained a healthy level. Find out how much equity you have built in your house by examining the comparables in your area, as well as your latest appraisal.

3. Housing Trends: Now that you have researched the local housing trends, you must ask yourself whether or not you feel comfortable making a move in your particular economic climate. Are you confident that values will hold in your region? Do you feel that there is a healthy balance of buyers and sellers, should you need to move and sell? Your local real estate agent can answer many questions pertaining to local market trends.

3. Family Considerations: Moving up may mean moving away from friends, family, and school districts. Be sure to take this into consideration before jumping into a life changing situation. Move ups, however, can also be a blessing for growing families. Space can become limited as children or aging parents are included into the daily structure.

4. Energy: A bigger house means more energy consumption. This translates into a bigger carbon footprint, as well as a heftier monthly bill. If you are moving up, consider looking for homes that meet green standards. Energy star rated appliances, adequate insulation, and even new insulated windows can make a huge difference.

Remember, homeownership is a long-term investment. In today's troubled market it is best to keep in mind that home values may not be at their bottom. But if you meet the financial qualifications outlined above, then a long-term investment, and a "move up" sound like a good fit! Now, have fun picking out your dream home!


Written by Carla Hill
Published by Realty Times

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Homeowners Expect Prices to Fall

Has renewed concerns over the job market affected the way agents and homeowners feel about the market? HomeGain's nationwide third quarter 2011 home values survey found that forty-seven percent of surveyed real estate professionals nationwide expect home values to decrease over the next six months.

Additionally, an overwhelming majority of buyers feel that homes on the market are still overpriced, with 30 percent reporting they feel homes are overpriced by 10 to 20 percent.

Is this opportunism running rampant? Recent studies in affordability rates could lead us to believe so, as home values have plummeted across the nation and are already at generational highs.

Is the sentiment of overpriced homes a symptom of reduced consumer confidence in the market? Lynn Franco, Director of The Conference Board Consumer Research Center, reported late last month, "Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years. A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers' assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence."

On top of these already dismal findings, foreclosures are still a large segment of most area markets. The largest percentage (32 percent) of those surveyed see 10 to 20 percent of the market made up of foreclosed properties.

“Homeowners have joined real estate professionals and now share their dour view on the direction of home prices. Last quarter only 30 percent of homeowners expected home prices to drop in the coming six months while 50 percent of real estate professionals expected price declines. In the current survey 45 percent of homeowners and 47 percent of real estate professionals expect home price declines in the next six months,” said Louis Cammarosano, General Manager of HomeGain.

Are you curious to know which states real estate agents and homeowners think will see price increases in the next six month? HomeGain supplies us with the list.

• Arizona
  
• Florida
  
• Texas
  
• California
  
• Ohio
  
• Tennessee
  
• Colorado
  
• Georgia
  
• Virginia
  
• Washington

On the flip side are the 10 states where agents and homeowners expect to see home price declines.

• New Jersey
  
• Pennsylvania
  
• North Carolina
  
• Georgia
  
• Virginia
  
• Illinois
  
• Massachusetts
  
• New York
  
• California
  
• Ohio

It's important to point out that several states made both lists. How can this be? It's just another clue that our market is volatile and unpredictable at this time. Too much of the housing market is tied to fluctuations in the jobs and stock market. Yet, real estate is extremely localized as well. You may have a boom market on one side of Ohio while another city across the state experiences declines.

In a down national economy, such as the one currently seen in the states, it's wise to keep an eye on national economic trends in stocks, jobs, and banking. It's also wise to take a hard look at your local economy. It may be the best future indicator of where housing will go in your community in the next six months.


Written by Carla Hill
September 14, 2011

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Mortgage Rates Attain New All-Time Record Lows Again

MCLEAN, Va., -- Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates, fixed and adjustable, hitting all-time record lows amid market and employment concerns and economic uncertainty. The previous record lows for fixed mortgage rates, and the 1-year ARM, were set the week of August 18, 2011. The 5-Year ARM matched its all-time low set last week at 2.96 percent.

30-year fixed-rate mortgage (FRM) averaged 4.12 percent with an average 0.7 point for the week ending September 8, 2011, down from last week when it averaged 4.22 percent. Last year at this time, the 30-year FRM averaged 4.35 percent.

15-year FRM this week averaged 3.33 percent with an average 0.6 point, down from last week when it averaged 3.39 percent. A year ago at this time, the 15-year FRM averaged 3.83 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent this week, with an average 0.6 point, the same as last week when it averaged 2.96 percent. A year ago, the 5-year ARM averaged 3.56 percent.

1-year Treasury-indexed ARM averaged 2.84 percent this week with an average 0.6 point, down from last week when it averaged 2.89 percent. At this time last year, the 1-year ARM averaged 3.46 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Market concerns over Eurozone sovereign debt default and a weak U.S. employment report for August placed downward pressure on Treasury bond yields and allowed fixed mortgage rates to hit new lows this week. On net, the economy added no new jobs last month and was the weakest reading since September 2010. Meanwhile, the unemployment rate remained at 9.1 percent, marking its 31st consecutive month of being above 8 percent, the longest such stretch in 70 years."

"The Federal Reserve (Fed) painted a bleaker picture as well in its September 7th regional economic review. Seven of its 12 Districts reported more subdued views of business conditions. Many of the Fed's manufacturing contacts downgraded or became more cautious about their near-term outlooks due to increased economic uncertainty."


September 9, 2011, Published on RealtyTimes.com

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Sluggish Economy Keeping Low Mortgage Rates in Place

Recently reported data regarding U.S. jobs is having a negative impact on global markets throughout the world. As stocks have suffered, the sluggish economy is keeping low mortgage rates in place as investors continue to choose safe assets.

Freerateupdate.com's daily survey of wholesale and direct lenders show that mortgage rates have remained stable for the past week as a result of uneasiness that continues to flood the markets. Current 30 year fixed mortgage rates are at 3.875%, 15 year fixed mortgage rates are at 3.250% and 5/1 adjustable mortgage rates are at 2.625%. On the bright side, the majority of consumers are employed and, with good credit, can take advantage of these historical low mortgage rates. With housing prices down, this can be a win-win situation for many and an opportunity that may never happen again. These low conforming rates are available with 0.7 to 1% origination point to well qualified borrowers who can meet lender guidelines to receive approval.

FHA mortgage rates also continue to be low. Many consumers choose FHA mortgage loans because they are consumer friendly since it is goal of FHA to promote homeownership. FHA 30 year fixed mortgage rates are at 3.750%, FHA 15 year fixed mortgage rates are at 3.500% and FHA 5/1 adjustable mortgage rates are at 2.750%. Despite FHA's higher closing costs (APR), which is due to the upfront mortgage insurance premium and other FHA fees, borrowers find FHA's benefits assist in making the overall transaction affordable. A down payment of 3.5% is accepted with a credit score as low as 580, but FHA mortgage rates are not affected by low credit scores. FHA also allows borrowers to use gifts that meet the guidelines, as well as housing grants to reduce FHA mortgage loans.

The only change this week was with jumbo 30 year fixed mortgage rates which are at 4.625%, a decrease of .125%. Jumbo 15 year fixed mortgage rates are at 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. Since jumbo mortgage loans are not government insured, borrowers must have excellent credit in order to receive lender approval. These are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee to well qualified borrowers.

With the end of the summer season here, August statistics have started to roll in. Consumer Confidence continues to drop below forecast which is never good news for the economy. According to S&P/Case-Shiller, home prices increased 3.6% during the second quarter of this year, but this is still a drop from last year. The Chicago PMI Manufacturing Index also fell. The big news is the job market which continues to struggle. With no new jobs added in August, U.S. investors as well as global markets started to react on Friday as they fled stocks and turned to safe investments. This will continue to be a news maker in the week ahead as the President prepares to address the job situation on Thursday.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.


Written by Ed Ferrara
September 7, 2011

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