Mortgage Business

It Sure Seems Like Spring

20140309-080351.jpgEven though there has been snow in some parts of the country very recently, it feels like springtime with regard to the economy. We continue to have some fairly positive economic news released. The releases have included a stronger than expected retail sales report and leading economic indicators for March. Any good news regarding consumer spending is good news for the economy as a whole. The news from the real estate sector we received last week was much less promising and again we wonder how much this news was affected by the weather.

This week is a very important week and will go a long way to let us know whether the cold winter slowdown is behind us. We start out with pending home sales then follow with consumer confidence and a meeting of the Federal Reserve and then towards the end of the week personal income and spending numbers are released. And that is just the warm up. After the private payroll data is release by ADP on Wednesday, the jobs report closes out the week.

Lately there has been no report more important than the release of the employment numbers for the month. With the Federal Reserve making their post-meeting announcement on Wednesday, personal spending data on Thursday and the employment report release on Friday, it could be a week with plenty of fireworks. Any one release could give us a surprise that could shake up the markets. At this point, the markets believe that the economy is waking up. We just might see if the economy awakens groggily or with plenty of vigor.

Weekly Interest Rates OverviewThe Markets. Rates ticked up in the past week despite weak real estate news. Freddie Mac announced that for the week ending April 24, 30-year fixed rates increased to 4.33% from 4.27% the week before. The average for 15-year loans rose to 3.39%. Adjustables were unchanged with the average for one-year adjustables remaining at 2.44% and five-year adjustables at 3.03%. A year ago 30-year fixed rates were at 3.40%. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans edged up following the uptick in the 10-year Treasury note late last week. Existing home sales were essentially flat with a 0.2 percent decline in March to a seasonally adjusted annual rate of 4.59 million. However, new home sales fell nearly 15 perc ent in March to an annual rate of 384,000, well below consensus.”   Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages Updated April 25, 2014

  Daily Value Monthly Value
  April 24 March
6-month Treasury Security 0.04%  0.08%
1-year Treasury Security 0.10%  0.13%
3-year Treasury Security 0.91%  0.82%
5-year Treasury Security 1.74%  1.64%
10-year Treasury Security 2.70%  2.72%
12-month LIBOR    0.557% (Mar)
12-month MTA    0.124% (Mar)
11th District Cost of Funds    0.709% (Feb)
Prime Rate    3.25%

20140309-080538.jpgThe 2013 State of Hispanic Homeownership Report, published by the National Association of Hispanic Real Estate Professionals, finds that Hispanics are expected to comprise 50 percent of all new home buyers by 2020. The U.S. Hispanic population accounted for an increase of 2.6 million owner households—or nearly 47 percent of all home ownership growth in the country between 2000 and 2013. The population of Hispanic people in the United States is growing rapidly and is a key indicator of housing demand, the repo rt notes. The Hispanic population in the U.S. is currently about 53 million. Between now and 2050, that number is expected to grow 167 percent—compared to a 42 percent growth rate projected for the rest of the U.S. population. “This is a story of pent-up demand,” says Jason Madiedo, president of NAHREP. “Latinos are ready to buy homes now. Their biggest obstacle coming into today’s market isn’t credit; it’s lack of available housing. The readiness of this first-time buyer market represents a whole new purchase cycle that can drive recovery in local communities and put the housing recession behind us once and for all.” Source: RISMedia Click Here For The Full Report

The number of homes for sale is on the rise, a long-awaited welcome to home buyers who are finding more selection than last spring and less competition, according to®’s National Housing Trend Report for March of the 146 markets it tracks. Inventories of for-sale homes on® in March increased 9.5 percent higher than year ago levels, according to the report. The median list price is $199,900 – 5.3 percent higher than in March 2013. The median age of inventory has also risen – 22.9 percent above year ago figures to a median of 102 days on the market. “These figures suggest that the market is more balanced than it was in 2013, when a shortfall in available supply led to double-digit increases in many markets’ housing prices,” according to the® report. “Having more homes on the market may mean more affordable prices for first-time and move-up buyers. Lack of inventory in 2013 led to intense competition, creating another barrier to home ownership.” Bidding wars were frequent last year and caused prices to rise and become out of reach to some first-time home buyers who could barely save for a down payment, says Steve Berkowitz, CEO of Move, Inc. “While inventory is still low, the continuing annual lift in the number of homes on the market that we’ve seen over the first months of 2014 is an indicator that buying conditions this year may be notably improved from the frenzied pace of last spring,” says Berkowitz. Source:®

Both parties have to come together in a transaction, and real estate professionals sometimes find themselves wedged in the middle of buyer and seller disagreements. Some sellers may accuse the home buyers of being too pushy with their demands. Here are several ways that homebuyers have been annoying some sellers recently, including:

  • Disrespectful house visitors: Some buyers may not be respectful when touring a home, letting their child run wild or bounce on the furniture, cranking up the heat and air conditioning, or even using the restroom.
  • Submitting a long list of defects: Ron Phipps, principal with Phipps Realty in Warwick, R.I., and a former president of the National Association of Realtors®, says that buyers are doing themselves a disservice when submitting an offer with a long list of what’s wrong with the house. It makes sellers question why the buyers would want this place. Instead, Phipps recommends a gentler approach:
  • Too many visits: After buyers have committed to purchase a home, they want to make lots of visits to their future home, bringing the decorators, architects as well and entire family with them, says Mike Lubin, associate broker for Brown Harris Stevens in New York. The sellers may find the constant visits disruptive, however, as they’re busy packing and possibly doing repairs to meet a deadline.
  • Renegotiation: Buyers may agree on the price but then repeatedly demand concessions and discounts. The home inspection can be a culprit. For example, buyers may realize the furnace has about five good years left and then make a demand for a new furnace or monetary equivalent. “A realistic buyer knows everything’s not going to be perfect,” says Matt Laricy, managing partner with Americorp Real Estate in Chicago. Source: 

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