mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc
2/25/2013

Existing Home Inventory Drops to 13 Year Low:

What kind of housing market does the following scenario sound like? Home Prices are up 12.3% from 12 months ago, the inventory of available homes for sale are down 25.3% from a year ago and the number of units sold are up. Sound like a great housing market to be in for a seller, right? Well that is exactly the market that we are in right now.

The National Association of Realtors said on Thursday that existing home sales rose 0.4 percent last month to a seasonally adjusted annual rate of 4.92 million units. That was the second highest rate of sales since November 2009, when a federal tax credit for home buyers was due to expire.

Inventories were down 25.3 percent from January 2012. At the current pace of sales, inventories would be exhausted in 4.2 months, the lowest rate since April 2005.

The low inventories are also helping pushing prices higher. Nationwide, the median price for a home resale was $173,600 in January, up 12.3 percent from a year earlier.

With this positive housing market and interest rates that are still well below normal levels, the Spring housing market looks to be a strong one.

What Happened to Rates Last Week?

colorado home loan

Mortgage backed securities (MBS) gained +3 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move sideways. We had our highest mortgage rates on Thursday and our lowest rates on Wednesday.

We had a holiday-shortened week that saw the vast majority of economic data hit over a two day period. On the inflation front, both the Producer Price Index and the Consumer Price Index were very tame. Tame inflation is always good for bonds. We also saw an uptick in Initial Jobless Claims and very weak Philly Fed manufacturing data. This was all positive for bonds and for rates.

But offsetting that negative economic news were the release of the minutes from the last Fed meeting. These minutes showed an improved outlook on the economy. We also saw improvement in Existing Home Sales. This positive economic news is negative for bonds and rates.

As a result, mortgage backed securities traded in a very well-defined channel last week.

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.

new home loan denver

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

mortgage broker denverVince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
Fax: 877-840-0965
vince@coloradomortgageguy.com
10952 S. Pikes Peak Dr.
Parker, CO 80134
www.coloradomortgageguy.com

Comments are closed.