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?

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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.

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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

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