mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc

Bidding Wars are Back:

The bidding wars are back. Seemingly overnight, many of the nation’s major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.

In March, 75% of agents with broker Redfin said their clients’ offers were countered by rival bids, up from 56% who said so in late 2011.

The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.

“The only question is not whether a new listing will get multiple bids but how many it will get,” said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.

Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin’s CEO. Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman.

“With buyers out in force and sellers cautious, the market is in an awkward ‘tweener’ phase,” he said.

What Happened to Rates Last Week?

colorado mortgage rates

Mortgage backed securities (MBS) gained +119 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move to lower. We had our highest mortgage rates on Monday morning and our lowest rates on Friday.

All U.S. based bonds (including MBS) rallied on two main factors: 1) Reduced risk of domestic inflation and 2) Global fear. Lets address the first factor: The economic releases were a major disappointment with just about every economic report coming in below market forecasts. Both ISM Manufacturing and Non-Manufacturing showed economic expansion but at levels that were significantly lower than recent trends. ADP Private Payrolls, Initial Jobless Claims and the Unemployment report missed the mark and really disappointed the markets. The Unemployment Rate dropped from 7.7% to 7.6% but that was due to the participation rate falling, not due to an improvement in the labor force. MBS rallied (giving you the best rates of 2013) on the Non-Farm Payroll data which came in significantly lower than forecasts.

The second factor was global fear. Economic reports showed an economic retraction in Europe and their European Central Bank said that they would be in an accommodative stance for a very long time. We saw weaker numbers out of Asia and the Bank of Japan announced yet another round of intervention. But the greatest factor was North Korea and the “saber rattling” which has traders very concerned that an event could escalate there. This all drives foreign funds into our bonds and temporarily helps our mortgage rates.

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.

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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
vince@coloradomortgageguy.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com

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