FHA Loan Houston Blog » mortgage

Consumer Confidence Report In

admin — Tue, 29 Dec 2009 16:29:10 +0000

CC came in at 52.9, very close to the predicted 53.

Rates are stable at the moment and are not changing leading into the auction here shortly.

Rates Not Taking a Break

admin — Mon, 28 Dec 2009 15:13:14 +0000

Currently down 34 bps for the morning, rates may start .125% higher this morning.

We’re teetering right under the 200 DMA and in volatile territory, so hopefully you’ve taken advantage of our FREE advice of locking in your loan programs a while ago. Right now is not a time to be risking your rate, and a locking stance is what I see to be of most benefit.

Sound risk management is a strategy that I use when advising clients of whether it is more beneficial to lock in or float their mortgage loan, and let me be the first to tell you, this is extremely crucial when you are dealing with the biggest debt of your life. Analyzing economic reports and their effects on the mortgage bond market is something that you have to keep on top of, and without this data (yes, I sound like a nerd), you and your loan are gambling!

Guys, another holiday week, so that means its short in terms of economic reports and its time for YOU to enjoy! Lock in your mortgages and spend some QT with your family.

Rates Testing Support

admin — Wed, 23 Dec 2009 19:27:41 +0000

MBS very volatile today due to all the reports.

The New Home sales dropped 11.3% in November to 355K as opposed to the 438K that was expected, and while this helped MBS, the Treasury is now going to auction off $122B instead of the $118B that was expected, so this brought them back down.

If you have a new transaction in the works today, I’d go ahead and just lock it and play it safe.

Morning Market Update 12/18/09

admin — Fri, 18 Dec 2009 14:27:02 +0000

Currently down around 12 bps, there are no economic reports coming out today.

Yesterday was a decent day in terms of mortgage bonds, as we were in the green practically all day.

Bernanke got voted in for a second term as Fed Chairman, and the Fed stated that they intended to keep rates low for an extended period of time, however, the MBS purchase program is going to end on March 31, 2010. The MBS (mortgage backed securities program) is where the Fed buys pools of various mortgage bonds in case you didn’t know.

Let’s clear something up very quickly.

When speaking to several clients, I hear “Oh the Fed is ‘reducing’ rates” or “I heard the Fed is keeping rates at 0%” and expect a 0% mortgage rate on their home loan- THIS DOES NOT MEAN MORTGAGE RATES FOLKS.

The Fed does not control mortgage rates. Mortgage Backed Securities are what determine mortgage rates and it depends on how those securities are traded and at what price that result in the current market mortgage rates.

What the Fed controls is the “Fed Funds Rate” or “Discount Rate” and that is it. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans, and most importantly the rate in which banks charge one another to lend money to each other overnight (overnight lending rate). This is basically for one day loans that banks facilitate between themselves to ensure liquidity. When the Fed announces a “cut in rates”, mortgage rates most often will actually move in the opposite direction as the Fed change, as this has to do with the dynamics within the financial markets.

Please read this as it is very important!

MBS Program set to expire soon
Tax Credit Ending soon
FHA Guidelines possibly tightening up
RESPA Changes

Folks, if you are looking to buy a home or refinance, NOW IS THE TIME TO DO IT while rates are still low and the incentives are still here. This is not going to last forever!

Take advantage while you can, and have a fantastic Friday!

Morning Market Update 12/17/09

admin — Thu, 17 Dec 2009 16:07:28 +0000

Good morning folks,

Currently we up about 36 basis points (bps) as of this morning, as stocks are in negative territory and the Philadelphia Fed Index (an indicator of manufacturing sector trends) came in higher than expected.

We’re bouncing back from some of the losses from the past week, but I wouldn’t expect MBS to move enough to improve mortgage rates today by a significant amount, if any. Stay tuned for any updates.

Morning Market Update 12/16/09

admin — Wed, 16 Dec 2009 15:21:48 +0000

Currently up around 6 bp for the morning and hovering around the 100 Day Moving Average (DMA), the CPI (Consumer Price Index-average price of basket of goods spanning over 200 categories) came in at the estimated 0.4% as well as the Housing Starts (number of new monthly residential construction projects that are underway) which came in at 574k.

The FOMC meeting is scheduled for 2:15pm EST later today. Basically what’s going on here is that the Fed will likely state that they intend to keep the Federal Funds Rate at 0% for an extended period of time into 2010. This will ease fears on inflation as we approach the new year, and hopefully keep mortgage rates stable for a little while longer.

I’d stay where you’re at on any rate locks for the moment as we enter the FOMC meeting later this afternoon.

Cheers, and have a great day!

Morning Market Update 12/15/09

admin — Tue, 15 Dec 2009 15:53:40 +0000

Top of the morning to everyone!

So this morning’s economic reports swung mortgage rates in the direction you’re not wanting to hear.

The PPI (Producer Price Index- measures wholesale inflation) came in higher than expected, and the NY Empire manufacturing index came in much lower than expected.

Since we’ve seen the hits this morning, there would be no point in locking in losses, so continue to float if you have a transaction going on.

Folks, interest rates change daily and due to the economic environment that we are currently in, we are seeing these great low mortgage rates. You must understand that in 2010, you will undoubtedly see higher mortgage rates come across because we can’t be in a recession forever.

Take advantage of what you have in front of you and don’t look back. There are WAY too many incentives to cash in on!

30 Year Bond Results In

admin — Thu, 10 Dec 2009 18:14:27 +0000

And another auction hits the dust.

30 Year Bond results are in and, like yesterday, not good news. Currently down 28 bps for the day currently hedging both levels of support.

I would play it safe and lock in any transactions, folks.

Morning Market Update

admin — Mon, 07 Dec 2009 14:02:07 +0000

Good morning all…

MBS is currently up 16bp on the morning and hovering around the 1st level of support.

As for today, there are no economic reports set to come out, so looks like what will be a quiet Monday. (Kind of like what Tim Tebow’s experiencing today…)

2 important days this week are Thursday (Jobless Claims) and Friday (Retail Sales). On Thursday we will also see the auction of the 3 and 10 year notes, as well as the 30 year bonds.

Stay put and if anything changes, I’ll be back.

Mortgage Rates Down to New Record Low

admin — Wed, 25 Nov 2009 13:55:36 +0000

By Holden Lewis • Bankrate.com

Another week, another record low for mortgage rates.

The benchmark 30-year fixed-rate mortgage fell 6 basis points to 5 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point.

That’s the lowest rate on the 30-year fixed in the history of Bankrate’s weekly mortgage index, which began in September 1985. The index’s previous all-time low had been set last week.

The mortgages in this week’s survey had an average total of 0.44 discount and origination points. One year ago, the mortgage index was 5.97 percent; four weeks ago, it was 5.35 percent.

The benchmark 15-year fixed-rate mortgage fell 1 basis point to 4.47 percent. The benchmark 5/1 adjustable-rate mortgage fell 4 basis points to 4.54 percent. That’s the lowest it has been since Bankrate began collecting 5/1 ARM rates at the beginning of 2005.

The good news is that mortgage rates are so low. The bad news is that unemployment is high and rising, causing more homeowners to fall behind on their mortgage payments. As a result, it’s harder to get a mortgage because lenders are tightening their underwriting standards — for example, requiring bigger down payments and scrutinizing borrowers’ finances.

A good news/bad news dichotomy exists in home prices and sales. This week saw the release of the S&P/Case-Shiller home price indexes for September and for the third quarter. Depending on how you looked at the data, you could conclude that house prices were rising or barely rising or falling.

In Case-Shiller’s national index, prices were down 8.9 percent in the third quarter, compared with the third quarter of 2008. In Case-Shiller’s index of 20 big metro markets, prices were down 9.4 percent from the third quarter of 2008.

But things look different when you look at what’s happening lately. In those same 20 big metro areas, prices went up 0.3 percent in September. But they had risen at faster — 1.2 percent — in August. With house prices, the foot let up on the accelerator in September.

Generally, prices have been rising in the last six months, says David M. Blitzer, chairman of the index committee at Standard & Poor’s. But, he adds, “the gains in the most recent month are more modest than during the seasonally strong summer months.”

Of the big metro areas, San Francisco and Washington, D.C., have had price gains for six months in a row. Las Vegas is on the other end of the scale: Prices there have fallen 37 months in a row in the S&P/Case-Shiller index.

Tax credit drives sales

Another widely watched indicator is the National Association of Realtors’ report on existing home sales, which came out this week. It showed a robust increase in home sales in October. Sales were up 6.6 percent in October compared with September. Adjusting for seasonal factors (typically, sales slow down in October), the annual pace of home sales rose 10.1 percent in October.The Realtors’ chief economist, Lawrence Yun, attributes the sales increase to the first-time homebuyer tax credit, which originally had been scheduled to expire at the end of this month. Many buyers rushed to beat that deadline in October, Yun says.

Yun’s theory is reinforced by what happened to prices. Even though sales were up in October, home prices were down. Normally, you expect prices to rise when there’s an increase in sales. But first-time homebuyers tend to buy less-expensive houses. Sales of starter homes were up and sales of McMansions presumably were down, so the price of a typical home fell, too.

Nationally, half of the houses resold in October cost more than $173,100. That’s a 1.7 percent decrease from September’s median price of $176,000.

The Realtors’ data imply that the Midwest is pulling out of the housing slump faster than other regions. In the Midwest, the median resale price fell just $600 in October, compared with November, to $146,600. And compared with a year earlier, house prices in the Midwest were actually up 1.1 percent — the median price in October 2008 was $145,000. The Midwest was the only one of the four regions that had a year-over-year increase in median home price.

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