Sunday, March 30, 2014

All About Housing This Week....

This week has been all about housing, and the good news is that overall the housing data is positive.  Although the reports are not showing tremendous growth, there is clear indication that the housing market is continuing its slow but steady recovery.

According to the Federal Housing Finance Administration, home prices gained 0.5 percent in January which piggybacks on December?s 0.7 percent rise. Although the increase is less than the prior month, the report continues to indicate a positive trend in values.  Of the nine regions surveyed, eight of them showed gains in the last month.  The only area to decline was the West South Central.

Compared to the same time a year ago, prices are 7.4 percent higher.

The second major housing report for the week comes from the Case-Shiller Home Price Index.  This report showed that home prices are still rising but not quite as much as before.  Case-Shiller's adjusted monthly sales gain for January is strong with a 0.8 percent increase.  In line with the FHFA data, the Case-Shiller report shows that home prices are higher than a year ago.  This report shows prices are 13.3 percent higher.

The value gains are very convincing with all 20 cities showing increases led by the West coast.  Florida and several Midwest and Northeast cities also showed strong value increases.

The final housing report for the week was for new home sales.  In February the pace of sales in this area could not keep up with the strong pace of January.  The annual rate of 440,000 sales was 15,000 less than January?s revised figure of 455,000.

The slowing did help boost inventory supply upward to 5.2 months for February whereas Januarys pace was 5.0 months.  Thin supply has been a major factor in holding down sales nationally.  Prices on new homes has also been a factor in keeping sales slow.

According to the Mortgage Bankers Association of America, applications for purchase applications rose 3.0 percent for the week of March 21st.  Compared to the same time last year, applications for purchases is down a very sharp 17.0 percent. With home sales higher than a year ago and mortgage applications for purchases being lower, that is a clear indication that there continues to be a large contingent of buyers paying cash of their purchases.  With a slight increase in mortgage rates, it is once again proven just how sensitive borrowers are to mortgage rates.  The MBA reported for the same week that purchase applications increased, refinance applications declined 8.0 percent.

Next week the potential market reports are:

  • Tuesday April 1st - ISM Manufacturing Index
  • Wednesday April 2nd - MBA Applications, ADP Employment Report and Factory Orders
  • Thursday April 3rd - First Time Jobless Claims
  • Friday April 4th - National Employment Report

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Thursday, March 27, 2014

Monday, March 24, 2014

A Fairly Subdued Reaction

Despite the week being filled with a number of potential market moving reports, for the most part the investor reaction remained fairly subdued.  The concern and market trepidation over what is happening in Russia has been on investors minds however they are not placing many investment decisions based upon those event at the present time. The market is up more than 150 points through the Thursday.

On the real estate front housing starts came in pretty much as expected for the month of February.  Permits for new construction were higher than the majority of analysts forecast. Housing starts declined 0.2 percent to a 907,000 annual rate.  The previous month was a 909,000 annual rate for January which followed a downwardly revised December number of 1.024 million. In the report single-family starts rose 0.3 percent after they plunged 13.2 percent in January.  Permits for new construction jumped 7.7 percent after decreasing 4.6 percent in January.

The second housing report for the week was the existing home sales report.  For the sixth time in seven months, sales of existing homes declined.  The most recent report showed a contraction of 0.4 percent in February following a very severe 5.1 percent drop in January. Harsh weather in the North East and Mid-Atlantic states is believed to be the main factor for the decline.  From the same time last year existing home sales are down 7.1 percent which is the steepest decline in nearly 3 years.

The slow pace of sales is easing supply constraints as which increased to 5.2 months from 4.9 months. It appears though that good news for this segment is just around the corner as reports of increasing real estate activity in all areas of the country is taking hold.

The other piece of major news investors had their eye on for the week was the Federal Open Market Committee?s announcement on monetary policy released Wednesday.  The announcement came with little surprise however the message disappointed many investors.  The FOMC announced that they are going to continue to cut their bond buying stimulus program by $10 billion per month and that as of now the plan is to have the program ended by December 31st.  Investors, although not surprised by the announcement, were hoping that the Fed may state that they plan to keep the program going longer in order to maintain the artificially low borrowing rates.

The second major component of the Fed announcement on monetary policy is that they are not going to necessarily change the plan based upon the Department of Labor?s monthly unemployment report.  In prior months the plan for making changes to monetary policy was based upon the unemployment rate.  Wednesday?s announcement from the Fed indicated that they will take a more broad view on the economic recovery to make decisions regarding changes in monetary policy.

Next week the potential market reports are:

Tuesday March 25th - New Home Sales, FHFA House Price Index, Case-Shiller HVI
Wednesday March 26th - MBA Applications and Durable Goods Orders
Thursday March 27th - First Time Jobless Claims and GDP
Friday March 28th - Personal Income and Outlays

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Tuesday, March 18, 2014

Current Home Loan File - Big Valley Mortgage

Mike at Big Valley Mortgage talks about the current documentation needed to get a home loan. Big Valley Mortgage can handle the new regulations. See more at

Saturday, March 15, 2014

A Quiet Week

Even though it was supposed to be a quiet week relating to economic data reports, that did not stop the stock market from tumbling on Thursday by over 200 points.  The forces behind the decline were significantly weaker than expected growth forecast for the China economy combined with continuing tension between Russia and the Ukraine.  Even though economic reports for the U.S. have been improving as of late, that does not seem to be enough to counteract international challenges.  In the world?s global economy, what happens clear across the globe, can have a big impact here at home.

The Mortgage Bankers Association reported that purchase applications for the week ending March 7th declined a minimal 1.0 percent.  Refinance applications declined 3.0 percent.  In recent weeks there has been wild swings in the MBA data.  The housing market continues to improve however mortgage applications for purchases are down 17 percent from a year ago.  This statistic reinforces that there continues to be a significant amount of cash buyers in the market.

The employment outlook continues to improve with first time jobless claims declining another 9,000 down to 315K.  This report is far below most analysts estimations of 330K.  Claims being in the low range of the 300?s is a very good sign for future labor statistics.  Granted this report is only for one week however in recent times claims have been trending downward.

Retail sales made a comeback in February which is a welcome sign considering that bad weather has been playing a factor in so many areas of the country.  The only negative to the report is that January?s numbers were weaker than initially estimated.  Retail sales rose 0.3 percent in February after declining 0.6 percent in January (originally down 0.4 percent).

In another positive outlook for the economy is that the consumer confidence index rose last week to the second-highest level since August of 2013.  Americans seem to be more upbeat about the economy and the opportunity to make purchases in the near future.

One of the biggest battles being fought is that on wages.  Up until now we have been hearing about the push to increase the national minimum wage to $10.10.  Many workers at various retail and fast food establishments have been pushing to receive $15.00 an hour.  Thursday the wage battle escalated.

McDonald?s has been served with seven class action lawsuits in New York, California and Michigan for wage theft.  The complaint states that the company has forced employees to work off the clock, and not paid overtime as well as going as far as striking hours off employee?s time cards.  Between the lawsuit and the pressure to increase minimum wage, cheeseburgers are about to cost a whole lot more.

Next week there is a lot of potential market moving news and data being released.

        Monday March 17th - Industrial Production
        Tuesday March 18th - Consumer Price Index and Housing Starts
      Wednesday March 19th - MBA Applications and the FOMC Meeting Announcement
        Thursday March 20th - First Time Jobless Claims and Existing Home Sales

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Tuesday, March 11, 2014

A Great Mortgage To Rehabilitate A Home

To comprehend exactly what a FHA 203K Mortgage is we should for starters have an understanding of exactly what a FHA mortgage loan is.
The FHA provides federal government assured mortgages to home purchasers that provides the lenders the assurance to loan money to individuals they might not typically grant a home loan to.
It's not to imply that you will be borrowing funds coming from the federal government neither is it to say that by applying for a FHA mortgage loan you might routinely be accepted.
However it is to say that you will be more probably to be accepted for a FHA mortgage loan than the usual conventional mortgage when you have average or substandard credit rating, such as a bankruptcy, as well as lower than 20% for a down payment. Presently the down payment requirement is 3.5% and that is significantly lower than conventional mortgages.
One of the best deals currently offered by FHA and HUD is the HUD $100 Down Payment Incentive Program. You can buy a HUD foreclosed home with only $100 down payment and if you want to you can still use the FHA 203K Mortgage to rehab it if needed.
Now that we can comprehend the fundamentals of the FHA mortgage loan, it is time to introduce the fact, besides what the regular FHA loan provides, that there are numerous additional FHA home loan programs which home purchasers may decide to take benefit.
These includes the traditional 30 year fixed rate mortgage loan, traditional 15 and 20 year mortgage loans and even many types of adjustable rate mortgages also. You may also get qualified for refinancing or taking out the home equity by way of a home equity loan through FHA programs also.
It appears, although, that probably the most favorite FHA home loan programs that exist is a FHA 203k Mortgage. These loans have the common features of standard FHA mortgages such as versatile credit, assumable mortgages, as well as lower down payment to name some. Yet, they will go one step more by making it simple to rehabilitate a home all in a single loan grouped together.
Having an FHA 203K Mortgage may help individuals who have to renovate their present homes by acquiring financing to do. Also, home buyers may use these mortgages to buy and rehabilitate a pre-existing house in another place.
This could help everybody involved from the neighborhood by making surrounding places better for all the people of the community, to the property owners themselves by permitting people to buy what might be their own dream house, and as well as offering the money for making your dream home possible.
All of this, plus under one mortgage package deal, in the current unpredictable real estate marketplace, taking benefit of FHA programs is certainly the strategy to use!
Considering the glut of foreclosures in the marketplace which includes HUD homes for sale that a number of them needs repairs, the FHA 203K Mortgage could be the solution to acquiring or rehab your own dream home at a discount cost!

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Saturday, March 8, 2014

The Weather?

The weather?the weather?the weather!  It is the weather that seems to being blamed from everything from low consumer confidence, to a decline in manufacturing, to poor retail sales.  The relentless cold and snow in the Mid-Atlantic States all the way up to the Northeast through the month of February has many residents in those areas feeling the blues.  If you watch any newscasts where they interview people from those areas, you hear words like "depressed", "sad" and "tired".  The West Coast has their share of challenges with the extreme changes in weather from drought to flooding and mud slides depending on the area.  The bottom line, is regardless of what part of the country you live in, the weather is playing havoc in the minds of so many people. 

The reason I bring up the impact of the weather is that there is significant disparity between economic data that is monthly versus weekly.  Monthly data being released this week reflects economic conditions that for the most part are one to two months old.  Weekly data is much more reflective of current trends.

First time jobless claims eased as the weather changed.  Initial claims declined a significant 26,000 for the week ending March 1st.  Once again claims are in the low 300,000 area which can be a positive sign for future employment. 

The big number that everyone seems to care about and focus on is the labor department?s employment data which was released on Friday at 8:30AM.  To almost everyone's surprise the payroll numbers came in better than expected.  Although the unemployment rate increase from 6.6% to 6.7%, the big number was new jobs added to nonfarm payrolls.  The 175,000 jobs created in February was much better than January?s 129,000.

On the housing front, recent declines in mortgage rates combined with a break in the weather in the last week and a half has transferred into borrower activity.  The Mortgage Bankers Association of America reported that for the prior week purchase loan applications jumped 9.0 percent and refinance apps rose 10.0 percent.  The reports are a huge sigh of relief for many in the real estate and mortgage finance industries as the previous report showed declines of 4.0 percent and 11.0 percent.  Many believe the significant upswing is a sign of things to break for the spring market.

Speaking with real estate professionals, many have noted a significant jump in buyer inquiries and traffic at open houses.  On the selling side, many more home owners are contacting agents requesting Comparative Market Analysis Reports (CMA's) which lets sellers know approximately what their house is worth in today?s market conditions.  The increase in CMA requests is usually a precursor to sellers placing their home on the market for sale.  The future looks bright for the housing market in the coming months as there appears to be significant pent up buyer demand.

Next week potential market moving reports are on the lighter side once again.

       Wednesday March 12th - MBA Applications and 10 Year Note Auction
      Thursday March 13th - First Time Jobless Claims and Retail Sales
     Friday March 14th - Producer Price Index and Consumer Sentiment

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Tuesday, March 4, 2014

On A More Positive Note...

What a difference a week makes.  Last week I must admit my economic report was definitely far more negative than we have seen in a very long time.  Unfortunately based upon all the data last week, the only way I could have made the report uplifting was to make up economic data.

THE GOOD NEWS this week I am excited to report that there has been a lot of positive economic data and much of it is related to the housing market.

On Tuesday the Federal Housing Finance Agency reported that home prices rebounded 0.8 percent in December after declining 0.1 percent in November.  The trend for home prices has been upward in recent months and the quarterly reports on prices has risen for 10 straight quarters.  Additionally, the FHFA reported that home prices are 7.7 percent higher than a year ago.

The second positive housing report also was released on Tuesday from the S&P Case-Shiller Home Price Index.  According to this report home price appreciation was solid in December but slower than in previous months. The Case-Shiller's 20-city index for December rose an adjusted 0.8 percent, which was slightly down from the two prior month?s gains of 0.9 percent and 1.1 percent.  This was the slowest gain since July however the fact that the report remained solidly positive is a great sign.  The best part of the S&P report is that home prices are 13.4 percent higher than one year ago.

In a wild turn of events, new home sales jumped a whopping 9.6 percent in January for the strongest yearly rate since July 2008. Given the harsh weather in the Northeast and the Mid-Atlantic regions, this report was far better than expected, especially after Decembers report showed a decline of 7.0 percent.

The West led the country in the new home market increase with an 11.0 percent gain.  The South which was the leader in the number of new home sale units jumped 10.4 percent.  The big rise in sales has brought down supply from 5.2 months in December to 4.7 months in January.  The lack of inventory has limited sales overall and the further decline will continue to impact future new home sales.

Surprisingly January's heavy weather did not impact new home sales anywhere near the way it did for existing homes.  This report, despite its wild swings, offers rare good news on the housing market and will boost the outlook for home builders.

Experts dont seem to be paying much attention to this weeks Mortgage Bankers Report on weekly loan applications.  Although the MBAs report was negative for both purchase and refinance applications, it is noted that in holiday weeks it is very common for the report to show declines in loan applications.

Next week potential market moving reports are:

        Monday March 3rd  ISM Mfg Index
       Wednesday March 4th - MBA Purchase Applications and ADP Employment Report
        Thursday March 5th - First Time Jobless Claims and Factory Orders
        Friday March 6th  National Employment Situation

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Saturday, March 1, 2014

Preparing for the Final Walk Through Process

Assuming that it is time for you to perform the final walk through process on the house that you purchased, can you say that you are very ready? Here are some tips that can help you prepare for that time.
1. Clear out your day's schedule so you can have plenty of time for the final walk through. See to it that you are cleared out of meetings and other social functions. It is never advisable to conduct the walk through on such a limited time frame. Hurrying can result in missing out the reasons why you are on the house that will become yours in a matter of days or weeks.
2. On the night before your scheduled walk through, prepare the contract and study the conditions stipulated thereof. This will help you address the specified concerns on the walk through itself.
3. Be ready with the home inspection report as you can refer to it during the walk through to see if the agreed repairs were done as per your request.
4. Do you have other friends who recently purchased a house? Ask them of what they did during the walkthrough. Their opinions and suggestions can definitely give you hints on what additional things you should look for on the final walk through.
5. When possible, have your realtor accompany you on that day too. Because of his experiences with many walkthroughs with other clients, he can give you insights on what you should dig out while on the property you purchased.
6. Never perform a walk through all by yourself. You can always have your partner or a friend go with you on that day. Though you have two eyes, an extra pair can always see a detail that you cannot see.
7. Arm yourself with a camera to take pictures of the house parts including the basement, attic, and crawl space. You can view them at a later time to see problems that your eyes might have missed.
The final walk through is an important step just before the closing. By following the tips enumerated above, reap the benefits of a stress-free and hassle-free move in and be spared of extra time and effort you have to exert addressing issues which in the first place should be handled at the time of the final walk through process. According to experts, it is an essential process which is one of the keys towards making the right choice when it comes to buying a house.

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