mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc
06/10/2013

New Home Sales to Increase Even With Higher Rates:

The housing recovery is on a normal trajectory and gradual increases in interest rates won’t slow it down, according to Home Builder Lennar CEO Stuart Miller.

With interest rates at historic lows, Miller expects that as rates move up, slight increases “are not going to stop the progress forward” of the housing recovery. “Housing continues to find its rebound and gain strength,” he said. “Over the past five years we have under-constructed for a growing household formation that has been stymied by economic downdrafts.”

Miller estimates that the country needed 1.25 million to 1.5 million homes per year over the past few years, but instead only about 500,000 homes were constructed. “We’re going to have to catch back up in order to serve the needs of a growing population,” he said. “We have to make up for the deficit we’ve had in the past years.”

The key force is a tight supply of housing exacerbated by a lack of land availability, he said. “What you’re seeing with the builders is an inability to really get the land that we need to be able to build the homes to meet the demand,” he said. “So you have inventories that are very, very low, and that is driving prices up.”

Miller also said that the cost of commodities for builders is a “mixed bag” and that prices of homes are rising faster than costs. “I don’t think you can read a lot from costs,” he said, adding that although costs of raw materials are going down, other factors, like labor, are getting more expensive.

“We’re starting to see a real recovery in housing that is not likely to be pulled back,” he said.

What Happened to Rates Last Week?

colorado mortgage rates

Mortgage backed securities (MBS) lost -55 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move upward for the sixth straight week. We had our highest mortgage rates on Friday and our lowest rates on Monday morning.

Manufacturing, as measured by the ISM Index contracted but offsetting that was an expansion in the servicing sector which represents 2/3 of our economy. But last week was all about jobs data and on Friday, we received the much anticipated Non-Farm Payroll Report. Economists were expecting a reading around 170K but traders had been trading at levels that would be reflective of a 150K range. So, when Non-Farm Payrolls came in at a better than expected 175K, MBS sold off which erased the small gains that we had for the week and drove mortgage rates higher for the sixth straight 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.

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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.

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

mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc
06/03/2013

Pending Home Sales Surge Over 10%:

The National Association of Realtors reported that signed contracts to purchase a home increased 10.3% from this time a year ago. These are called “Pending Home Sales” because there is a signed contract but the home has not closed yet. On a month-over-month basis, Pending Home Sales increased 0.3%.

Sales Prices continue to shoot up and the number of Pending Home Sales would have increased even more if it wasn’t for a huge shortage in available quality inventory.

“The housing market continues to have gains from already very positive conditions. Pending contracts so far this year easily correspond to higher closed home sales in 2013,” said Lawrence Yun, chief economist for the Realtors.

“Because of inventory shortages, higher home sales will push up home values to the highest level in five years,” Yun said, adding that the national median existing-home price should increase close to 8 percent and exceed $190,000 in 2013.

There are also fewer distressed homes for sale. Banks have been doing more aggressive loan modifications, and some banks are reportedly holding foreclosed homes off the market, as home prices continue to rise.

What Happened to Rates Last Week?

colorado mortgage rates

Mortgage backed securities (MBS) lost -108 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move upward for the fourth straight week. We had our highest mortgage rates on Friday and our lowest rates on Thursday.

We had another very volatile week with large swings in MBS pricing. MBS continued to be pressured by growing sentiment that the Federal Reserve would begin to decrease the amount of monthly purchases of Fannie Mae, Freddie Mac and Ginnie Mae mortgage backed securities. The Fed is such a larger purchaser of these MBS that a pull-back in their monthly purchases would dramatically impact demand and traders are trying to front-run this pull-back.

We also had some very good economic reports. As our economy grows, bonds sell off. Chicago PMI, Consumer Sentiment, Consumer Confidence were all very strong and caused mortgage rates to rise. GDP was revised downward from 2.5% to 2.4% but it didn’t materially impact 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.

colorado va 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.

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

mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc
05/28/2013

Home Prices Jump Most in Seven Years:

U.S. single-family home prices rose in March, racking up their best annual gain in nearly seven years as the housing recovery continues to provide a source of strength for the economy, a closely watched survey showed on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas gained 1.1 percent in March on a seasonally adjusted basis, topping economists’ forecasts for 1 percent. Prices in the 20 cities jumped 10.9 percent year over year, beating expectations for 10.2 percent and the biggest increase since April 2006.

All 20 cities covered by the index saw yearly gains for the third month in a row. Average prices in March were back at their late-2003 levels.

For the first quarter of this year, the seasonally adjusted national index rose 3.9 percent, stronger than the 2.4 percent gain that was seen in the final quarter of last year.

What Happened to Rates Last Week?

colorado va mortgage

Mortgage backed securities (MBS) lost -83 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move upward for the third straight week. We had our highest mortgage rates on Friday and our lowest rates on Tuesday.

We had a very volatile week with large swings in MBS pricing. We traded in a very large range with a -166 BPS range between our highs and lows. Bonds (which include MBS) sold off on much better than expected Existing and New Home Sales, Initial Jobless Claims and Durable Goods Orders. So, mortgage rates were on a higher path last week.

But that was amplified by Ben Bernanke’s statements on Wednesday. As he discussed the potential to scale back on monthly MBS purchases if conditions continued to improve. Then, later that day, the minutes from the last FOMC meeting were released and it became clear that there is some discussion at the Fed of pulling back on MBS purchases as early as June. This caused bonds to sell off and pushed mortgage rates higher.

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.

home loan frederick, firestone, colorado

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.

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

mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc
05/13/2013

Fannie Mae Profit Points to Growing Housing Market:

Remember Fannie Mae? They and Freddie Mac were both placed into receivership because they were loosing so much money but had to remain open because if they shut down there would be no mechanism to make and securitize mortgages to the vast majority of Americans.

Well, Fannie Mae is baaaaaack, posting it largest profit ever. Yes that’s right, they posted a bigger profit than even at the height of the housing boom.

Mortgage giant Fannie Mae has now been turning a profit for more than a year. In fact, it has turned record a profit: $8.1 billion in its latest quarter.

With Fannie Mae and its smaller cohort, Freddie Mac, turning so much profit, the push to dismantle them becomes far more complicated. Unlike several years ago, they are now making the government money at the same time that the feds considered winding them down.

The chief beneficiary of Fannie’s newly discovered riches is none other than the federal government—the same entity that bailed it out at the height of the financial panic nearly five years ago. Fannie Mae will pay the Treasury $59 billion by the end of this quarter, bringing its total tally of dividend payments to $95 billion—close to the $117 billion it originally drew.

Now that Fannie and Freddie are on solid footing again, they can begin to loosen up underwriting standards. But this time it will be small and responsible adjustments. Still, relaxing the guidelines even just a little could open the door for many potential new homebuyers that have been kept of out of the market.

What Happened to Rates Last Week?

denver new home loan

Mortgage backed securities (MBS) lost -89 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move upward for the second straight week. We had our highest mortgage rates on Friday and our lowest rates on Thursday morning.

We traded in a very thin range for the majority of the week as MBS were trapped in a narrow trading channel that saw very small daily movements (+1 to -7BPS) from Monday through Thursday. There were very few economic releases. The biggest report to hit the wires was Thursday’s weekly Initial Jobless Claims which were lighter than expected. This was good news for the economy and pressured bonds slightly. We had a 10 year Treasury auction which saw a pull back in demand but it really didn’t impact MBS pricing by the end of the day.

MBS really sold off on Friday, in the absence of any economic data. When MBS sell off, mortgage rates rise.

Why did they sell off? There were several reasons but lets focus on the two largest factors: First, the Treasury Secretary stated that we would not hit our debt ceiling again until later than the market had projected. Remember, MBS are trading higher than normal (better rates for you) due to fear and uncertainty about our debt. The fact that our deficit is doing better than expected is a negative for our bonds because it means that Congress will put off solving our larger issues longer.

Secondly, the Yen has absolutely tanked and that has made investment in other foreign markets more attractive than in the U.S.

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.

home loan highlands ranch

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.

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