Consumer Sentiment Moves off of Highs:
Americans turned less optimistic about the economy in early February on worries about falling income even as their outlook on the jobs market rose to a record high, a survey released on Friday showed.
The Thomson Reuters/University of Michigan Index of Consumer Sentiment fell back in February with a preliminary score of 72.5 that is 2.5 pts lower than January’s score of 75.
Current conditions, and more precisely a negative tone towards current finances, was the heaviest drag. Even though optimism towards the job market kept up, the CSI was unable to hang on to sentiment expressed last month. Market expectations averaged to 74.5.
The optimism in their job outlook is encouraging though and is certainly reflective of the steady string of better than expected Initial Weekly Jobless Claims and the recent decline in the national Unemployment Rate. As these trends in lower Unemployment continue, look for the Consumer Sentiment to regain some ground.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) lost -26 basis points from last Friday to the prior Friday which moved mortgage rates higher on a week-over-week basis. That also marked a -68 basis point drop in MBS pricing from our all time high on 02/02/12.
Mortgage backed securities (and therefore mortgage rates) moved sideways during the week with only minor movements in reaction to the 10 year and 30 year U.S. Treasury auctions. But MBS did sell off on Friday on news that Greece would come through with another austerity package that would qualify them for additional bailout funds.
The Greek story has been an important one for mortgage rates. Mortgage rates are artificially too low due to increased demand for U.S. bonds as a pure “safety play” against a European financial collapse. A default by Greece would start a “domino effect” of other countries defaults too. So, any positive news that a default is postponed will cause our rates to increase.
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. I will be watching these reports closely for you and let you know if there are any big surprises:
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.
Quote of the week:
“The new mortgage deal hurts responsible home owners but rewards those that put little down and were late on their payments.” – Banking Analyst Dick Bove
Vince 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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Mortgage applications jump on refi demand: MBA
February 8, 2012 7:56 AM ET
NEW YORK (Reuters) – Applications for home mortgages jumped last week, fueled by increased demand for refinancing as interest rates fell, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 7.5 percent in the week ended Feb 3.
The MBA’s seasonally adjusted index of refinancing applications climbed 9.4 percent, while the gauge of loan requests for home purchases was nearly flat, edging up just 0.1 percent.
The refinance share of total mortgage activity also increased to 80.5 percent of applications, from 80.0 percent.
Fixed 30-year mortgage rates averaged 4.05 percent, down 4 basis points from 4.09 percent the week before.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
Vince 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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Housing Market Picture Brightens with Job Gains:
The pace of job creation surged in January, with the US economy generating 243,000 new positions while the unemployment rate dropped to 8.3 percent, according to government data released Friday.
Both numbers were far better than the consensus estimates, which expected a growth of 150,000 jobs and a steady unemployment rate of 8.5 percent.
Job gains have been concentrated primarily in the service sector, particularly in retail and the food and beverage industries. Warehousing, manufacturing, mining and health care also have participated.
True to form, services were responsible for 162,000 of the January swell, with manufacturing payrolls growing 50,000. Government cuts subtracted 14,000 from the total. Retail has added 390,000 jobs since December 2009, while durable goods manufacturing is up 418,000 over the past two years, according to government figures.
Housing demand is driven primarily by two factors (neither is interest rate): Consumer Sentiment and Employment Stability. So, the surprisingly strong Nonfarm Payroll data is certainly good news for the housing industry.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained just +4 basis points from last Friday to the prior Friday which moved mortgage rates sideways on a week-over-week basis.
But the real story was that on Thursday MBS shot up to their highest levels (and therefore lowest mortgage rates) ever as the benchmark Fannie Mae 3.5% coupon traded at its highest level since it has been issued.
But MBS sold off of their highs and had a major reversal on Friday which moved mortgage rates upward from Thursday’s level on the much better than expected Unemployment Rate and Nonfarm Payroll data.
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. I will be watching these reports closely for you and let you know if there are any big surprises:
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.
Quote of the week:
“Everything counts in large amounts” – Depeche Mode
Vince 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
If you enjoyed this article, please consider sharing it!
Plum Creek Funding Inc 1/30/2012
Consumer Sentiment Rises in January for Fifth Monthly Gain:
A measure of consumer sentiment rose in January for the fifth straight monthly gain, according to data released Friday, as job gains helped put worries about U.S. government finances in the background.
The final January reading of the University of Michigan/Thomson Reuters gauge of consumer sentiment reached 75.0, compared to a preliminary report of 74.0 and a December reading of 69.9. The sentiment gauge, which covers how consumers view their personal finances as well as business and buying conditions, averaged about 87 in the year before the start of the most recent recession.
Recent job growth has been improving, though still well below the pace needed to bring unemployment significantly below the 8.5% rate it was last month.
Obviously, this is important to housing. As consumers feel better about the economy, the more likely they are to purchase a home.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained +150 -91 basis points from last Friday to the prior Friday which moved mortgage rates to their lowest level in 4 months.
This was a complete reversal from the previous week where we lost -91 basis points.
MBS shot up (and therefore mortgage rates moved lower) primarily for three reasons. Front and center was the Fed.
The Fed left their key interest rates alone but made a statement that their fed fund rate would essentially be zero until 2014 which caused MBS to rally.
Also the 4th QTR GDP numbers did show economic growth at 2.8% but fell short of the market expectations of 3.0%. This helped mortgage rates because this report was not inflationary.
U.S. bonds also benefited from concerns in Europe that the renegotiations between Greece and their bond holders was not going well. This could trigger Greece to finally default and cause some additional financial instability in the region.
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. I will be watching these reports closely for you and let you know if there are any big surprises:
DateTimeEconomic Release
30-Jan8:30PCE (MoM)
30-Jan8:30Core PCE (MoM
30-Jan8:30Core PCE (YoY)
30-Jan9:55PCE (YoY)
30-Jan8:30Pesonal Income
31-Jan9:00S&P Case-Shiller Home Price Index
31-Jan9:45Chicago Purchasing Managers Iindex
31-Jan10:00Consumer Confidence
1-Feb7:00MBA Mortgage Applications
1-Feb8:15ADP Employment
1-Feb10:00Consutruction Spending
1-Feb10:00ISM Manufacturing
1-Feb10:00ISM Prices Paid
1-Feb10:30EIA Crude Oil Stocks
1-Feb17:00Total Vehicle Sales
2-Feb8:30Initial Jobless Claims
2-Feb8:30Continuing Jobless Claims
2-Feb8:30Nonfarm Productivity
2-Feb8:30Unit Labor Costs
3-Feb8:30Average Weekly Hours
3-Feb8:30Nonfarm Payrolls
3-Feb8:30Avg. Hourly Earnings (MoM)
3-Feb8:30Avg. Hourly Earnings (YoY)
3-Feb8:30Unemployment Rate
3-Feb10:00Factory Orders
3-Feb10:00ISM Non-Manufacturing
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.
Vince 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
If you enjoyed this article, please consider sharing it!
Existing Home Sales Rose 5% in December:
Home sales rose in December to the highest pace in nearly a year. The gain coincides with other signs that show the troubled housing market improved at the end of last year.
The National Association of Realtors said Friday that sales increased 5 percent last month to a seasonally adjusted annual rate of 4.61 million, the best level since January 2011 and the third straight monthly increase.
Sales are increasing at a time when the market is flashing other positive signs. Mortgage rates are at record-low levels. Homebuilders have grown slightly less pessimistic because more people are saying they might be open to buying a home this year. And home construction picked up in the final quarter of last year.
The median sales price rose 2.3 percent to $164,500 in December.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) lost -91 basis points from last Friday to the prior Friday which moved mortgage rates upward.
The biggest economic surprise was the large decrease in the weekly Initial Jobless Claims data which is certainly positive for the economy, but negative for bonds.
But the real catalyst was a change in market sentiment that Greece’s bond holders were close to accepting the new terms of a “voluntary” hair cut of 60% to 70% on what they are owed. This removed some of the “fear factor” premium in bonds that have kept mortgage rates artificically low for the past 8 weeks.
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. I will be watching these reports closely for you and let you know if there are any big surprises:
Quote of the week:
“More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.” – NAR President Moe Veissi
Vince 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
If you enjoyed this article, please consider sharing it!
Mortgage applications surge on refinancing demand: MBA
January 18, 2012 7:01 AM ET
NEW YORK (Reuters) – Applications for home mortgages surged more than 20 percent last week, fueled by a wave of refinancing demand as interest rates dropped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 23.1 percent in the week ended January 13.
The MBA’s seasonally adjusted index of refinancing applications climbed 26.4 percent, while the gauge of loan requests for home purchases rose 10.3 percent.
“With mortgage rates reaching new lows, refinance volume jumped,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement. “Purchase activity also increased as buyers returned to the market after the holiday season.”
The refinance share of total mortgage activity rose to 82.2 percent of applications from 80.8 percent the previous week, making it the highest refinance share since October 2010.
Fixed 30-year mortgage rates averaged 4.06 percent, down 5 basis points from 4.11 percent.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
(Reporting By Leah Schnurr; Editing by Leslie Adler)
Vince 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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Foreclosure Filings Hit 4 Year Low:
The number of U.S. homes that received a foreclosure filing fell to a four-year low in 2011 as a slowdown in processing hit the market, RealtyTrac said in a report on Thursday.
Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, slid by 34 percent in 2011, the lowest level since 2007, just as the housing market was starting to crumble. RealtyTrac said there were filings on 1,887,777 homes last year.
Bank seizures of homes fell to 804,423 from 1,050,500 in 2010, also marking the lowest level in four years.
“A big part that is inflating the size of the decrease is a continuing extended foreclosure process,” said Daren Blomquist, director of marketing communications at RealtyTrac.
Nevada ranked as the state with highest foreclosure rate for the fifth year in a row, with one in 16 Nevada homes receiving at least one foreclosure filing in 2011. Even so, Nevada saw a 31 percent decrease in foreclosure activity for the year.
The length of time for foreclosure processing continued to increase in the final quarter of the year. Homes took on average 348 days to move through the process, up from 336 days in the third quarter and 305 days in the fourth quarter of 2010.
Foreclosures took the longest in New York state, where homes foreclosed in the fourth quarter took an average 1,019 days to complete the process. RealtyTrac also released foreclosure activity for December, which fell to a 49-month low of 205,024 homes, down nearly 9 percent from November. But bank repossessions rose 10 percent to 61,774.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +14 basis points from last Friday to the prior Friday which moved mortgage rates slightly lower.
We had a mixed bag of economic data with very strong readings in Consumer Sentiment but we had weaker than expected Retail Sales data.
Demand for our 10 year Treasury auction was very strong but pulled back on the 30 year Treasury bond auction.
With the long weekend, traders moved their money into bonds on Friday which helped to push mortgage rates lower.
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. I will be watching these reports closely for you and let you know if there are any big surprises:
Vince 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
If you enjoyed this article, please consider sharing it!
Jobs data points the way to stronger housing:
Real Estate used to be about location, location, location. Now it is most certainly about jobs, jobs, jobs.
We received some welcome news on the jobs front last week:
The private sector added a seasonally adjusted 325,000 jobs during the month, up from 204,000 in November, payroll-processing firm ADP said:
It marked the biggest monthly gain since December 2010, and was stronger than expected. Economists surveyed by Briefing.com were forecasting a gain of 180,000 jobs for the month. And the great news is that half of the gains were made by small business (companies with fewer than 50 employees).
Headline National Unemployment Rate Drops to 8.5%:
The U.S. Unemployment Rate unexpectedly fell to 8.5 percent last month as job creation was more robust than expected, providing continued signs that the nation’s labor market is improving gradually.
Growth in manufacturing jobs helped offset a loss in government positions, while wages edged higher and the length of the work week also lengthened a bit. Job gains came from a variety of quarters: Transportation and warehousing surged by 50,000, the couriers and message industry rose 42,000, and retail added 28,000. Manufacturing grew by 23,000 and the hospitality industry continued its brisk pace, adding 24,000 jobs in December and 230,000 over the past year at food and drinking establishments.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +37 basis points from last Friday to the prior Friday which moved mortgage rates lower.
Once again, we had much better than expected U.S. economic data with ISM Services, Total Vehicle Sales, ADP Payrolls, Non-Farm payrolls and Unemployment data.
Normally, these type of strong readings would cause bonds to sell off and your mortgage rates to rise. But once again it was the “fear factor” that kept traders buying bonds regardless of the strong U.S. economic data. Traders simply wanted a safe place to put their funds due to continued concerns over Europe and Iran’s threat to close down a major oil route.
What to Watch 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. I will be watching these reports closely for you and let you know if there are any big surprises:
Vince 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
If you enjoyed this article, please consider sharing it!
6 ways to retire without a mortgage
Paying off a home loan by the time you stop working can mean greater financial security. Whether you start early or later in life, there’s more than one approach to consider.
Admit it: Whether you’re 35 or 65, the prospect of retiring without a mortgage is an attractive one. No more monthly checks to your lender means extra money to spend on having fun once you exit the workforce. After years of punctual principal-and-interest payments, it’s the least you deserve, right?
There are several smart ways to retire without a mortgage. We’ve come up with six that fit a variety of retirement scenarios. Some approaches benefit from an early start — so if you are able, try to plan ahead. Other mortgage-free-retirement options can be put into effect even if you’re close to collecting Social Security.
Some retirees don’t mind a mortgage, be it for the tax write-off or to keep too much money from being tied up in home equity. But if your goal is the peace of mind that comes with paying off your loan before you reach retirement, check out these six ways to retire without a mortgage.
1. Make extra mortgage payments
Over time, a few bucks here and there tacked on to your mortgage payment can translate into thousands of dollars saved on interest and years shaved off the repayment period. The trick is to find small ways to cut corners on other household expenses so you can apply those modest savings toward your mortgage. Simply swapping out traditional incandescent light bulbs for compact fluorescent lights, for example, can save you $50 a year in energy costs. A programmable thermostat can save you up to $180 annually.
A little extra goes a long way. A $200,000 mortgage at 6% over 30 years works out to a monthly payment of about $1,200 (excluding taxes and insurance). You’ll pay just over $231,000 in interest alone. But put an extra $100 a month toward the same mortgage and you’ll save nearly $50,000 in interest and retire the loan five and a half years early.
2. Refinance your mortgage
A surefire way to trim the bill for your home loan is to refinance your mortgage to a lower rate for an equal or greater period of time. You’ll enjoy reduced payments and less strain on your bank account. Not a bad idea if money is tight. What you won’t enjoy is a mortgage-free retirement.
To pay off your mortgage early via refinancing, you’ll need to switch to a shorter-term loan. In 2011, a popular refi option for homeowners who weren’t underwater was going from a 30-year mortgage to a 15-year loan.
Let’s say you have 25 years left on a 30-year mortgage at 6% and still owe $175,000. You’d pay about $163,000 in interest over the remaining quarter-century. For just $167 more per month, plus one-time closing costs, you could refinance to a 15-year mortgage at 4% and save $105,000 in interest. And, of course, you’d be mortgage-free a decade earlier. (Does refinancing make sense for you? Check with MSN Money’s calculator.)
3. Downsize your home
Think about it: At a time when you’re supposed to be enjoying the simple life, do you really need a formal living room, separate dining room and two spare bedrooms that you never set foot in? If your answer is no, think about downsizing your home.
The beauty of downsizing to a smaller home in the same area is that you don’t need to say goodbye to your friends, family and community. Of course, beauty can also be found in the fact that you might be able to pay cash for your new abode. That means no mortgage.
And don’t limit your notion of downsizing. Just because you spent the past 30 years in a traditional ranch doesn’t mean you need to purchase another ranch with less square footage. Check out conventional alternatives (condos, townhouses) as well as unconventional options (houseboats, RVs and even tiny homes).
4. Relocate to a cheaper city
Can’t find the right place at the right price to retire in your hometown? Move somewhere cheaper. Sure, there will be sacrifices, but what you’ll give up in familiarity you’ll make up for financially. The best places to retire combine ample activities with affordable real estate. And moving to an affordable locale will boost the odds that you won’t have to take out a new mortgage.
Home prices aren’t the only factor. Consider property taxes and homeowners insurance premiums as well. Both affect the overall affordability of a home. In New Jersey, for example, property taxes and insurance premiums combined average $7,270. You’d pay just $1,444 in, say, Kentucky, one of the 10 most tax-friendly states for retirees. Some state and local governments reduce or even waive property taxes for residents 65 and older.
Feeling adventurous? You might be able to pay even less for a home and enjoy lower living expenses if you retire overseas. Look into bargain-priced and retiree-welcoming countries such as Belize, Mexico, Panama and Vietnam.
Vince 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
If you enjoyed this article, please consider sharing it!
Rate on 30-year mortgage down to record 3.91 pct.
January 5, 2012 10:37 AM ET
By DEREK KRAVITZ
WASHINGTON (AP) – 2012 looks to be another year of opportunity for the few who can afford to buy or refinance a home.
The average rate on the 30-year fixed mortgage fell to 3.91 percent this week, Freddie Mac said Thursday. That matches the record low reached two weeks ago.
The average on the 15-year fixed mortgage ticked down to 3.23 percent from 3.24 percent. That’s up from 3.21 percent two weeks, also a record low.
Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.
Still, cheap mortgage rates have done little too boost the depressed housing market. For eight straight weeks at the end of 2011, the average fixed mortgage rates hovered around 4 percent. Yet many Americans either can’t take advantage of the rates or have already done so.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Previously occupied homes are selling just slightly ahead of 2010′s dismal pace. New-home sales in 2011 will likely be the worst year on records going back half a century.
Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose in December to its highest level in more than a year.
But so far, rates are having no major impact. Mortgage applications have fallen slightly in recent weeks, according to the Mortgage Bankers Association.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week. The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate declined to 2.86 percent from 2.88 percent. The average on the one-year adjustable loan rose to 2.80 percent from 2.78 percent.
The average fee on the five-year adjustable loan rose to 0.7 from 0.6; the average on the one-year adjustable-rate loan was unchanged at 0.6.
Vince 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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